Caesars Entertainment, Inc. 10-K

czr-20201231 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31 , 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period to Commission File No. 001-36629 CAESARS ENTERTAINMENT, INC. (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation or organization) 46-3656781 (I.R.S. Employer Identification No.) 100 West Liberty Street , 12th Floor Reno , Nevada 89501 (Address of principal executive offices) Telephone: ( 775 ) 328-0100 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading symbol Name of each exchange on which registered Common Stock, $.00001, par value CZR NASDAQ Stock Market Securities registered pursuant to section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒ Indicate by check mark whether the registrant (1) has filed 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, a smaller reporting company, or 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 checkmark 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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ The aggregate market value of the common stock held by non-affiliates of the Registrant was $ 3.6 billion at June 30, 2020 based upon the closing price for the shares of CZR’s common stock as reported by The Nasdaq Stock Market. As of February 22, 2021, there were 208,277,434 outstanding shares of the Registrant’s Common Stock, net of treasury shares. Documents Incorporated by Reference Portions of the Registrant’s definitive proxy statement to be filed with the Commission pursuant to Regulation 14A in connection with the Registrant’s Annual Meeting of Stockholders (the “Proxy Statement”) are incorporated by reference into Part III of this report. Such Proxy Statement will be filed with the Commission not later than 120 days after the conclusion of the Registrant’s fiscal year ended December 31, 2020. CAESARS ENTERTAINMENT, INC. ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2020 TABLE OF CONTENTS Page Part I Item 1. Business 3 Item 1A. Risk Factors 14 Item 1B. Unresolved Staff Comments 26 Item 2. Properties 26 Item 3. Legal Proceedings 28 Item 4. Mine Safety Disclosures 28 Part II Item 5. Market for Registrants’ Common Equity , Related Stockholder Matters and Issuer Purchases of Equity Securities 29 Item 6. Selected Financial Data 30 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 31 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 57 Item 8. Financial Statements and Supplementary Data 58 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 58 Item 9A. Controls and Procedures 58 Item 9B. Other Information 61 Part III Item 10. Directors, Executive Officers and Corporate Governance 62 Item 11. Executive Compensation 62 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 62 Item 13. Certain Relationships and Related Transactions, and Director Independence 62 Item 14. Principal Accounting Fees and Services 62 Part IV Item 15. Financial Statement Schedules 63 EXHIBITS 64 SIGNATURES 69 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS OF CAESARS ENTERTAINMENT , INC. 70 2 PART I Item 1. Business. Caesars Entertainment, Inc., a Delaware corporation formerly known as Eldorado Resorts, Inc. (“ERI” or “Eldorado”), is referred to as the “Company,” “CEI,” “Caesars,” or the “Registrant,” and together with its subsidiaries may also be referred to as “we,” “us” or “our.” We also refer to (i) our Consolidated Financial Statements as our “Financial Statements,” (ii) our Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income (Loss) as our “Statements of Operations,” (iii) our Consolidated Balance Sheets as our “Balance Sheets,” and (iv) our Consolidated Statements of Cash Flows as our “Statements of Cash Flows.” References to numbered “Notes” refer to Notes to our Consolidated Financial Statements included in Item 8. 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. Our primary source of revenue is generated by gaming operations, and we utilize our hotels, restaurants, bars, entertainment, racing, sportsbook offerings, retail shops and other services to attract customers to our properties. We lease certain real property assets from third parties, including GLP Capital, L.P., the operating partnership of Gaming and Leisure Properties, Inc. (“GLPI”) and VICI Properties L.P., a Delaware limited partnership (“VICI”). Significant Transactions in 2020 On July 20, 2020, we completed the merger with Caesars Entertainment Corporation (“Former Caesars”) pursuant to which Former Caesars became our wholly-owned subsidiary (the “Merger”). As a result of the Merger, we currently own, lease or manage an aggregate of 54 domestic properties in 16 states with approximately 54,600 slot machines, video lottery terminals (“VLTs”) and e-tables, approximately 3,200 table games and approximately 47,700 hotel rooms as of December 31, 2020. We also have international operations in five countries outside of the U.S. In addition, we have other domestic and international properties that are authorized to use the brands and marks of Caesars Entertainment, Inc., as well as other non-gaming properties. Upon completion of our previously announced sales, or expected sales of certain gaming properties, we expect to continue to own, lease or manage 48 properties. See Item 2, “Properties,” for more information about our properties. In connection with the Merger, Caesars Entertainment Corporation changed its name to “Caesars Holdings, Inc.” and Eldorado Resorts, Inc. converted into a Delaware corporation and changed its name to “Caesars Entertainment, Inc.” In addition, effective as of July 21, 2020 our ticker symbol on the NASDAQ Stock Market changed from “ERI” to “CZR”. In connection with the Merger, we also entered into a Master Transaction Agreement (the “MTA”) with VICI, pursuant to which, among other things, we agreed to consummate certain sale and leaseback transactions and amend certain lease agreements with VICI and/or its affiliates with respect to certain property described in the MTA. See Item 7 for further discussion of the Merger and Acquisitions Related Activities. On July 1, 2020, the Company completed the sales of Isle of Capri Casino Kansas City (“Kansas City”) and Lady Luck Casino Vicksburg (“Vicksburg”). On September 30, 2020, the Company completed the sale of Harrah’s Reno. On April 24, 2020, the Company entered into a definitive purchase agreement with Twin River Worldwide Holdings, Inc. (“Twin River” or subsequently, “Bally’s Corporation”) and certain of its affiliates for the sale of the equity interests of Eldorado Resort Casino Shreveport Joint Venture and Columbia Properties Tahoe, LLC, the entities that hold Eldorado Resort Casino Shreveport (“Eldorado Shreveport”) and MontBleu Casino Resort & Spa (“MontBleu”), for aggregate consideration of $155 million, subject to a customary working capital adjustment. The definitive agreement provides that the consummation of the sale is subject to satisfaction of customary conditions, including receipt of required regulatory approvals. The sale of Eldorado Shreveport closed on December 23, 2020 for $140 million, subject to a customary working capital adjustment, and the sale of MontBleu is expected to close in the first half of 2021. On September 3, 2020, the Company and VICI entered into an agreement to sell Harrah’s Louisiana Downs Casino, Racing & Entertainment (“Harrah’s Louisiana Downs”) to Rubico Acquisition Corp. for $22 million, subject to a customary working capital adjustment, which proceeds will be split between the Company and VICI. The sale is subject to satisfaction of customary conditions, including receipt of required regulatory approvals and is expected to close in the first half of 2021. In connection with its review of the Merger, the Indiana Gaming Commission determined on July 16, 2020 that, as a condition to their approval of the Merger, the Company is required to enter into agreements to divest of three properties within the state of Indiana in order to avoid undue economic concentration. As discussed below, the Company has entered into agreements to sell 3 Tropicana Evansville (“Evansville”) and Caesars Southern Indiana. The Company plans to enter into an agreement to divest Horseshoe Hammond prior to December 31, 2021, as the deadline was extended by the Indiana Gaming Commission. On October 27, 2020, the Company entered into an agreement to sell Evansville to GLPI and Twin River for $480 million in cash, subject to a customary working capital adjustment. The sale is subject to satisfaction of customary conditions, including receipt of required regulatory approvals and is expected to close in mid-2021. Also on October 27, 2020, in conjunction with the execution of the agreement to sell Evansville, the Company’s subsidiaries, Isle Casino Bettendorf and Isle Casino Hotel Waterloo (collectively, the “Exchanging Subsidiaries”), entered into an Exchange Agreement with GLPI pursuant to which the Exchanging Subsidiaries agreed to transfer the real estate relating to the Isle Casino Bettendorf and Isle Casino Hotel Waterloo to GLPI in exchange for the real estate relating to Evansville. The exchange transaction closed on December 18, 2020 and as a result of the lease being classified as a finance obligation the exchange was accounted for as a debt modification. As a result of the exchange, the real estate relating to Evansville was removed from the master lease with GLPI that we entered into in connection with the acquisition of Tropicana (the “GLPI Master Lease”) and the real estate relating to Isle Casino Bettendorf and Isle Casino Hotel Waterloo is now subject to the GLPI Master Lease. On November 18, 2020, the sale of Bally's Atlantic City to Bally’s Corporation was completed for $25 million. The proceeds from the sale were split between the Company and VICI, and the Company received $5 million of net proceeds. In addition, on October 9, 2020, we reached an agreement to sell the Bally’s brand to Bally’s Corporation for $20 million, while retaining the right to use the brand within Bally’s Las Vegas into perpetuity. We agreed to reimburse Bally’s Corporation $30 million for capital expenditures required at Bally’s Atlantic City and recorded a liability within Accrued other liabilities and recorded a charge to Discontinued operations, net of income taxes. We expect that such commitment will be satisfied by adjusting obligations under certain sportsbook operating agreements between Bally’s Corporation and the Company following our expected acquisition of William Hill. On December 1, 2020, the Company entered into an agreement to sell the Belle of Baton Rouge (“Baton Rouge”) to CQ Holding Company, Inc. Pursuant to the terms of the GLPI Master Lease, Baton Rouge will be removed from the GLPI Master Lease, and the rent payments to GLPI will remain unchanged. GLPI will retain ownership of the real estate of Baton Rouge. The transaction is expected to close in mid-2021 and is subject to regulatory approvals and other customary closing conditions. On December 24, 2020, the Company entered into an agreement to sell Caesars Southern Indiana to the Eastern Band of Cherokee Indians (“EBCI”) for $250 million, subject to a customary working capital adjustment. Our annual payments to VICI under the Regional Lease (as defined below) will decline by $33 million upon closing of the transaction. Additionally, effective as of the closing of the transaction, the Company and EBCI will enter into a long-term agreement for the continued use of the Caesars brand and Caesars Rewards loyalty program at Caesars Southern Indiana. The sale is subject to satisfaction of customary conditions, including receipt of required regulatory approvals and is expected to close in the third quarter of 2021. Former Caesars’ properties, including Harrah’s Louisiana Downs, Caesars Southern Indiana, Horseshoe Hammond, Harrah’s Reno, Caesars UK group, including Emerald Resort & Casino, and Bally’s Atlantic City, have met held for sale criteria as of the date of the closing of the Merger. The sales of these properties have or are expected to close within one year from the date of the closing of the Merger and the properties are classified as discontinued operations. Proposed Acquisition of William Hill Since January 29, 2019, the Company has held 13 million ordinary shares of William Hill plc and a 20% ownership interest in William Hill US Holdco, Inc. (“William Hill US”), its United States subsidiary (together, “William Hill”). Additionally, the Company receives a profit share from the operations of sports betting and other gaming activities associated with the Company’s properties. See below for further detail. 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 of approximately £2.9 billion, or $3.7 billion. The transaction is conditioned on, among other things, the approval of William Hill plc shareholders, which was received on November 19, 2020, and receipt of required regulatory approvals. The Company announced the early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”) relating to the proposed combination with William Hill plc. A final UK court hearing is scheduled for the last week of March 2021 and we expect to close the acquisition shortly thereafter. See Note 1 for further details. 4 COVID-19 Public Health Emergency In January 2020, an outbreak of a new strain of coronavirus (“COVID-19”) was identified and has since spread throughout much of the world, including the United States. All of our casino properties were temporarily closed for the period from mid-March 2020 through mid-May 2020 due to orders issued by various government agencies and tribal bodies as part of certain precautionary measures intended to help slow the spread of the COVID-19 public health emergency. On May 15, 2020, we began reopening our properties and have resumed certain operations at all of our properties as of December 31, 2020, with the exception of additional temporary closures of Caesars Windsor, Harrah’s Philadelphia, and our properties in Illinois. Subsequently, Harrah’s Philadelphia and our properties in Illinois have reopened. The COVID-19 public health emergency has had a material adverse effect on our business, financial condition and results of operations for the year ended December 31, 2020. We continued to pay our full-time employees through April 10, 2020, including tips and tokens. Effective April 11, 2020, we furloughed approximately 90% of our employees, implemented salary reductions and committed to continue to provide benefits to our employees during the duration of their respective furlough period. A portion of our workforce has returned to service as the properties have resumed with limited capacities and in compliance with operating restrictions imposed by governmental or tribal orders, directives, and guidelines. Due to the impact of the ongoing COVID-19 public health emergency on our results of operations, we obtained waivers on the financial covenants in Former Caesars credit facility agreement and the GLPI Master Lease. Furthermore, we obtained waivers in relation to annual capital expenditure requirements under the leases with VICI. Business Operations Our consolidated business is composed of five complementary businesses that reinforce, cross-promote, and build upon each other: casino, food and beverage, hotel, casino management services, retail and entertainment and other business operations, including online sports betting and iGaming. Casino Operations Our casino operations generate revenues from approximately 54,600 slot machines and 3,200 table games, including poker, as well as other games such as keno, and race and online sportsbooks, all of which comprised approximately 67% of our total net revenues in 2020. Slot revenues generate the majority of our casino revenues, particularly in our properties located outside of Las Vegas and Atlantic City. Food and Beverage Operations Our food and beverage operations generate revenues from our dining venues, bars, nightclubs, and lounges located throughout our casinos, as well as room service in our hotels, and represented approximately 10% of our total net revenues in 2020. Many of our properties include several dining options, ranging from upscale dining experiences to moderately-priced restaurants. Hotel Operations Hotel operations generate revenues from hotel stays at our properties in our approximately 47,700 guest rooms and suites worldwide and represented approximately 13% of our total net revenues in 2020. Our properties operate at various price and service points, allowing us to host a variety of casino guests, who are visiting our properties for gaming and other casino entertainment options, and non-casino guests who are visiting our properties for other purposes, such as vacation travel or conventions. Management Services We earn revenue from fees paid for the management of five domestic casinos. Managed properties represent Caesars-branded properties where we provide staffing and management services under management agreements. Entertainment and Other Non-Gaming Operations We provide a variety of retail and entertainment offerings at our properties. We operate various entertainment venues across the United States, including the Colosseum at Caesars Palace and Zappos Theater at Planet Hollywood. These award-winning entertainment venues are scheduled to host prominent headliners, such as Sting, Usher, Donny Osmond, Morrissey and the Scorpions. The LINQ Promenade is an open-air dining, entertainment, and retail development located between The LINQ Hotel & Casino and Flamingo Las Vegas, which features The High Roller, a 550-foot observation wheel, and Fly LINQ, the first and only zipline on the Las Vegas Strip. The retail stores offer guests a wide range of options from high-end brands and accessories to souvenirs and decorative items. 5 CAESARS FORUM is a 550,000 square-foot conference center located at the center of the Las Vegas Strip. CAESARS FORUM features 300,000 square feet of flexible meeting space, the two largest pillarless ballrooms in the world, LEED silver-rating, and FORUM Plaza, the first 100,000 square-foot outdoor meeting and event space in Las Vegas. Though currently available for use, COVID-19 related restrictions have limited our ability to utilize the convention center and meeting space. Online Sports Betting and iGaming In September 2018, we entered into a 25-year agreement, which became effective in January 2019, with William Hill pursuant to which we (i) granted to William Hill the right to conduct betting activities, including operating sportsbooks, in retail channels and under our first skin and third skin for online channels with respect to our current and future properties located in the United States and the territories and possessions of the United States, including Puerto Rico and the U.S. Virgin Islands and (ii) agreed that William Hill will have the right to conduct real money online gaming activities utilizing our second skin available with respect to properties in such territories. We received a 20% ownership interest in William Hill US as well as 13 million ordinary shares of William Hill plc in exchange for the right to the use of certain skins (described above). The fair value of the William Hill US and William Hill plc shares received has been deferred and is recognized as revenue on a straight-line basis over the 25-year term of the agreement. The amortization of deferred revenues associated with our equity interests is included in other revenue within our Corporate and Other segment. Additionally, we receive a profit share from the operations of betting and other online gaming activities operated under our licenses. See Note 5. As mentioned above, we have entered into an agreement with William Hill plc on the terms of a recommended cash acquisition and the consummation of the acquisition is conditioned on receipt of required regulatory approvals. Currently William Hill operates 37 sportsbooks at our properties in eight states and, following the acquisition, Caesars and William Hill will be live with sports wagering across 15 U.S. states plus the district of Columbia. Additionally, the post-merger entity will operate regulated online real money gaming businesses in four states, Nevada, Pennsylvania, New Jersey, and Michigan, and continue to leverage the World Series of Poker (“WSOP”) brand, and license the WSOP trademarks for a variety of products and services. Players in New Jersey can play over 700 casino games including slots, table games, and video poker and we expect to similarly ramp the product offering in Pennsylvania and Michigan. Extensive usage of digital platforms and growing bettor demand are driving the market for online sports betting platforms in the United States. We believe that the proposed acquisition of William Hill positions us to address this growing market. In January 2021, we also made a strategic investment into a daily fantasy sports platform, as discussed below, which complements our strong mobile sports and gaming network. Sports Brand Partnerships — We continue to solidify local and national partnerships that align our casinos, resorts and brands with sports fans. In 2019, we announced high-profile exclusive sports entertainment partnerships with the NFL, making Caesars the first-ever “Official Casino Sponsor” in the history of the league. This historic partnership combines the NFL’s legendary events with our properties to bring unique experiences to Caesars patrons. This includes exclusive rights to use NFL trademarks in the U.S. and U.K. to promote our properties, also enabling Caesars to host exclusive special events and experiences. For example, in April 2019, Caesars and the NFL hosted the NFL Alumni Las Vegas Draft Party with exclusive fan access to an autograph session with legendary NFL players, giveaways and an open bar at the LINQ Hotel & Casino. Caesars will continue to host brand activations at prominent, high-profile NFL events, including the NFL Draft, NFL playoffs, and the Super Bowl during this multi-year partnership. Additionally, on August 24, 2020, the Company and ESPN opened a new ESPN-branded studio at the LINQ Hotel & Casino in Las Vegas where ESPN broadcasts sports betting-themed content and other programming. Under the agreement, Caesars has been designated as ESPN’s “Official Odds Provider,” ESPN produces and distributes certain content across ESPN’s media platforms that features Caesars branding, and Caesars purchases advertising across ESPN and its affiliated advertising platforms, among other terms. On September 10, 2020, the Company entered into a multi-year agreement with ESPN including link integrations from ESPN’s website and app to sportsbooks with our sports betting partner, William Hill. Market Activities Other Developments Our proposed acquisition of William Hill represents a compelling opportunity to improve the offering and experience for the customer by providing access to Caesars’ brand and highly regarded loyalty program (which had approximately 60 million members at the end of 2020). The combined company will also be afforded the ability to access our extensive and pre-existing relationships with various sports teams and events including being the Official Casino Sponsor of the NFL. Further, the combined company’s market access across the U.S. would be increased and would benefit from a broad network of sportsbook 6 locations. In addition to the proposed acquisition, in January 2021, we made a strategic investment in the daily fantasy sports platform with operations across seven professional sports in more than 35 states. The investment complements our strong mobile sports and gaming network by adding an innovative fantasy sports platform, allowing more options to play both online and in-person, and is expected to be tied to Caesars Rewards to permit players to earn credits redeemable for rewards and experiences, either online or at one of our casino resorts nationwide. Trends COVID-19 — The extent of the ongoing and future effects of the COVID-19 public health emergency on our business and the casino resort industry generally is uncertain, but we expect that it will continue to have a significant impact on our business, results of operations and financial condition. The extent and duration of the impact of COVID-19 will ultimately depend on future developments, including but not limited to, the duration and severity of the outbreak, business recovery trends, restrictions on operations imposed by governmental authorities, the potential for authorities reimposing stay at home orders or additional restrictions in response to continued developments with the COVID-19 public health emergency, the efficacy and availability of vaccines, our ability to adapt to evolving operating procedures, the impact on consumer demand and discretionary spending, the length of time it takes for demand to return and our ability to adjust our cost structures for the duration of the outbreak’s effect on our operations. Online Betting and Gaming — Online betting and gaming is a rapidly developing sector of the e-commerce industry and we believe the digital segment of the global betting and gaming industry will continue to grow in popularity and consumer confidence. The market for online betting platforms is being driven by increased use of digital processes and global, growing bettor demand. We anticipate that the United States market will begin to have a strong and steady uptake in active wagers as state-by-state legislation in the United States continues to evolve in response to recent legislation resulting in new opportunities in the United States sports betting market. The extent and future effects of online betting and gaming on our casino properties is uncertain but we expect that our online betting and gaming offering will be complementary to our brick-and-mortar casino business. Competition The casino entertainment business is highly competitive. The industry is comprised of a diverse group of competitors that vary considerably in size and geographic diversity, quality of facilities and amenities available, marketing and growth strategies, and financial condition. In most regions, we compete directly with other casino facilities operating in the immediate and surrounding areas. In Las Vegas, our largest jurisdiction, competition is expected to increase in the coming years. For example, the Genting Group is developing a casino and hotel called Resorts World Las Vegas, which is expected to open in summer 2021. It is located on the northern end of the Las Vegas Strip. In response to changing trends, Las Vegas operators have been focused on expanding their non-gaming offerings, including upgrades to hotel rooms, new food and beverage offerings, and new entertainment offerings. There have also been proposals for other large scale non-gaming development projects in Las Vegas by various other developers. Our Las Vegas Strip hotels and casinos also compete, in part, with each other. In recent years, many casino operators, including us, have been reinvesting in existing facilities, developing or rebranding new casinos or complementary facilities, and acquiring established facilities. These reinvestment and expansion efforts combined with aggressive marketing strategies by us and many of our competitors have resulted in increased competition in many regions. As companies have completed new expansion projects, supply has grown at a faster pace than demand in some areas. The expansion of properties and entertainment venues into new jurisdictions also presents competitive issues. Atlantic City, in particular, has experienced significant competitive pressure primarily due to the addition of gaming and room capacity associated with the expansion of gaming in Maryland, New York, and Pennsylvania, as well as the opening of new properties. This has resulted in several casino closings in recent years. Other examples of expected increases in competition in the markets include the recent legalization of casinos at licensed horse race tracks in Nebraska in November 2020 and the opening of Live! Casino and Hotel Philadelphia in February 2021. Our properties also compete with legalized gaming from casinos located on Native American tribal lands. While the competitive impact on operations in Las Vegas from the continued growth of Native American gaming establishments in California remains uncertain, the proliferation of gaming in California and other areas located in the same regions as our properties could have an adverse effect on our results of operations. In some instances, particularly in the case of Native American casinos, our competitors pay lower taxes or no taxes. In addition, certain states have legalized, and others may legalize, casino gaming in specific areas, including metropolitan areas from which we traditionally attract customers. These factors create additional challenges for us in competing for customers and accessing cash flow or financing to fund improvements for our casino and entertainment products that enable us to remain competitive. 7 We also compete with other non-gaming resorts and vacation areas, various other entertainment businesses, and other forms of gaming, such as state lotteries, on-track and off-track wagering, video lottery terminals, and card parlors. Our non-gaming offerings also compete with other retail facilities, amusement attractions, food and beverage offerings, and entertainment venues. Internet gaming and sports betting also create additional competition for our brick-and-mortar operations. Resources Material to Business Rewards Programs We believe Caesars Rewards, which we acquired in 2020 as a result of the Merger, enables us to compete more effectively and capture a larger share of our customers’ entertainment spending when they travel among regions versus that of a standalone property, which is core to our cross-market strategy. Legacy ERI loyalty club members are able to link their account to Caesars Rewards. Members who have joined Caesars Rewards can earn Reward Credits for qualifying gaming activity and qualifying hotel, dining and retail spending at all Caesars-affiliated properties in the United States, Canada, the United Kingdom, and Dubai. Members can also earn additional Reward Credits when they use their Caesars Rewards VISA credit card or make a purchase through a Caesars Rewards partner. Members can redeem their earned Reward Credits with Caesars for hotel amenities, casino free play and other items such as merchandise, gift cards, and travel. Caesars Rewards is structured in tiers (designated as Gold, Platinum, Diamond or Seven Stars), each with increasing member benefits and privileges. Members are provided promotional offers based on their Tier Level, their engagement with Caesars-affiliated properties, aspects of their casino gaming play, and their preferred spending choices outside of gaming. Member information is also used in connection with various marketing promotions, including campaigns involving direct mail, email, our websites, mobile devices, social media, and interactive slot machines. Intellectual Property and Resources We use a variety of trade names, service marks, trademarks, patents and copyrights in our operations and believe that we have all the licenses necessary to conduct our continuing operations. The development of intellectual property is part of our overall business strategy. We regard our intellectual property to be an important element of our success. We have registered several service marks, trademarks, patents and copyrights with the United States Patent and Trademark Office or otherwise acquired the licenses to use those which are material to conduct our business. We also own patents relating to unique casino games. While our business as a whole is not substantially dependent on any one patent, trademark, copyright, we seek to establish and maintain our proprietary rights in our business operations and technology through the use of patents, trademarks, copyrights, and trade secret laws. We file applications for and obtain patents, trademarks, and copyrights in the United States and foreign countries where we believe filing for such protection is appropriate, including United States and foreign patent applications covering certain proprietary technology of Caesars Enterprise Services, LLC (“CES”). We also seek to maintain our trade secrets and confidential information by nondisclosure policies and through the use of appropriate confidentiality agreements. CES’ United States patents have varying expiration dates. We have not applied for the registration of all of our trademarks, copyrights, proprietary technology, or other intellectual property rights, as the case may be, and may not be successful in obtaining all intellectual property rights for which we have applied. Despite our efforts to protect our proprietary rights, parties may infringe upon our intellectual property and use information that we regard as proprietary, and our rights may be invalidated or unenforceable. The laws of some foreign countries do not protect proprietary rights or intellectual property to as great of an extent as do the laws of the United States. In addition, others may independently develop substantially equivalent intellectual property. We own or have the right to use proprietary rights to a number of trademarks that we consider, along with the associated name recognition, to be valuable to our business, including Eldorado, Silver Legacy, Isle, Lady Luck, Tropicana, Circus Circus, Caesars, Flamingo, Harrah’s, Horseshoe, Paris, Caesars Rewards, WSOP, and licenses for the Planet Hollywood trademark used in connection with the Planet Hollywood in Las Vegas and for the Bally’s trademark used in connection with Bally’s Las Vegas in Las Vegas. 8 Industry Overview See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” See also Exhibit 99.1, “Gaming Overview,” to this Annual Report on Form 10-K, which is incorporated herein by reference. Seasonality We believe that business at our regional properties outside of Las Vegas is subject to seasonality, including seasonality based on the weather in the markets in which they operate and the travel habits of visitors. Business in our properties can also fluctuate due to specific holidays or other significant events, such as Easter (particularly when the holiday falls in a different quarter than the prior year), the WSOP tournament (with respect to our Las Vegas properties), city-wide conventions, a large sporting event or a concert, or visits by our premium players. We also believe that any seasonality, holiday, or other significant event may affect our various properties or regions differently. Gaming Licenses and Governmental Regulations The gaming and racing industries are highly regulated, and we must maintain our licenses and pay gaming taxes to continue our operations. We are subject to extensive regulation under laws, rules and supervisory procedures primarily in the jurisdictions where our facilities are located or docked. These laws, rules and regulations generally concern the responsibility, financial stability and characters of the owners, managers, and persons with financial interests in the gaming operations. If additional gaming regulations are adopted in a jurisdiction in which we operate, such regulations could impose restrictions or costs that could have a significant adverse effect on us. From time to time, various proposals have been introduced in legislatures of jurisdictions in which we have operations that, if enacted, could adversely affect the tax, regulatory, operational or other aspects of the gaming industry and us. We do not know whether or when such legislation will be enacted. Gaming companies are currently subject to significant state and local taxes and fees in addition to normal federal and state corporate income taxes, and such taxes and fees are subject to increase at any time. Any material increase in these taxes or fees could adversely affect us. Some jurisdictions, including those in which we are licensed, empower their regulators to investigate participation by licensees in gaming outside their jurisdiction and require access to periodic reports respecting those gaming activities. Violations of laws in one jurisdiction could result in disciplinary action in other jurisdictions. Under provisions of gaming laws in jurisdictions in which we have operations, and under our organizational documents, certain of our securities are subject to restriction on ownership which may be imposed by specified governmental authorities. The restrictions may require a holder of our securities to dispose of the securities or, if the holder refuses, or is unable to dispose of the securities, we may be required to repurchase the securities. A more detailed description of the regulations to which we are subject is contained in Exhibit 99.1 to this Annual Report on Form 10-K, which is incorporated herein by reference. Internal Revenue Service Regulations The Internal Revenue Service requires operators of casinos located in the United States to file information returns for U.S. citizens, including names and addresses of winners, for keno, bingo and slot machine winnings in excess of stipulated amounts. The Internal Revenue Service also requires operators to withhold taxes on some keno, bingo and slot machine winnings of nonresident aliens. We are unable to predict the extent to which these requirements, if extended, might impede or otherwise adversely affect operations of, and/or income from, other games. Regulations adopted by the Financial Crimes Enforcement Network of the Treasury Department (“FINCEN”) and the Nevada Gaming Authorities require the reporting of currency transactions in excess of $10,000 occurring within a gaming day, including identification of the patron by name and social security number. This reporting obligation began in May 1985 and may have resulted in the loss of gaming revenues to jurisdictions outside the United States which are exempt from the ambit of these regulations. In addition to currency transaction reporting requirements, suspicious financial activity is also required to be reported to FINCEN. Other Laws and Regulations Our businesses are subject to various federal, state and local laws and regulations in addition to gaming regulations. These laws and regulations include, but are not limited to, restrictions and conditions concerning alcoholic beverages, food service, smoking, environmental matters, employees and employment practices, currency transactions, taxation, zoning and building codes, and marketing and advertising. Such laws and regulations could change or could be interpreted differently in the future, or new laws and regulations could be enacted. Material changes, new laws or regulations, or material differences in interpretations by courts or governmental authorities could adversely affect our operating results. 9 The sale of alcoholic beverages is subject to licensing, control and regulation by applicable local regulatory agencies. All licenses are revocable and are not transferable. The agencies involved have full power to limit, condition, suspend or revoke any license, and any disciplinary action could, and revocation would, have a material adverse effect upon our operations. We also deal with significant amounts of cash in our operations and are subject to various reporting and anti-money laundering regulations. Such laws and regulations could change or could be interpreted differently in the future, or new laws and regulations could be enacted. Material changes, new laws or regulations, or material differences in interpretations by courts or governmental authorities could adversely affect our operating results. See Item 1A, “Risk Factors,” for additional discussion. Taxation Gaming companies are typically subject to significant taxes and fees in addition to normal federal, state and local income taxes, and such taxes and fees are subject to increase at any time. We pay substantial taxes and fees with respect to our operations. From time to time, federal, state, local and provincial legislators and officials have proposed changes in tax laws, or in the administration of such laws, affecting the gaming industry. It is not possible to determine with certainty the likelihood of changes in tax laws or in the administration of such laws. Environmental Matters We are subject to various federal, state and local environmental, health and safety laws and regulations, including those relating to the use, storage, discharge, emission and disposal of hazardous materials and solid, animal and hazardous wastes and exposure to hazardous materials. Such laws and regulations can impose liability on potentially responsible parties, including the owners or operators of real property, to clean up, or contribute to the cost of cleaning up, sites at which hazardous wastes or materials were disposed of or released. In addition to investigation and remediation liabilities that could arise under such laws and regulations, we could also face personal injury, property damage, fines or other claims by third parties concerning environmental compliance or contamination or exposure to hazardous materials and could be subject to significant fines or penalties for any violations. We have from time to time been responsible for investigating and remediating, or contributing to remediation costs related to, contamination located at or near certain of our facilities, including contamination related to underground storage tanks and groundwater contamination arising from prior uses of land on which certain of our facilities are located. In addition, we have been, and may in the future be, required to manage, abate, remove or contain manure and wastewater generated by concentrated animal feeding operations due to our racetrack operations, mold, lead, asbestos-containing materials or other hazardous conditions found in or on our properties. Although we have incurred, and expect that we will continue to incur, costs related to the investigation, identification and remediation of hazardous materials or conditions known or discovered to exist at our properties, those costs have not had, and are not expected to have, a material adverse effect on our financial condition, results of operations or cash flow. Reporting and Record-Keeping Requirements We are required periodically to submit detailed financial and operating reports and furnish any other information about us and our subsidiaries that gaming authorities may require. We are required to maintain a current stock ledger that may be examined by gaming authorities at any time. If any securities are held in trust by an agent or by a nominee, the record holder may be required to disclose the identity of the beneficial owner to gaming authorities. A failure to make such disclosure may be grounds for finding the record holder unsuitable. Gaming authorities may, and in certain jurisdictions do, require certificates for our securities to bear a legend indicating that the securities are subject to specified gaming laws. Human Capital Management We aim to provide a workplace that is engaging, empowering, inclusive and respectful for all employees (our “Team Members”), embracing a culture of openness, passion for service and recognition. Our ongoing investment in professional training and development, safety, health and wellbeing and Team Member recognition linked to guest satisfaction are all important drivers of our success in delivering outstanding financial results and creating value for our communities. We have approximately 54,000 employees at our domestic properties throughout our organization. 10 Labor Relations Approximately 21,000 of our employees are covered by collective bargaining agreements with certain of our subsidiaries. The majority of these employees in various job positions are covered by the following agreements: Employee Group Approximate Number of Active Employees Represented Union Date on which Collective Bargaining Agreement Becomes Amendable Las Vegas Culinary Employees 12,500 Culinary Workers Union, Local 226 May 31, 2023 Atlantic City Food & Beverage and Hotel Employees 3,000 UNITE HERE, Local 54 May 31, 2022 Las Vegas Bartenders 1,200 Bartenders Union, Local 165 May 31, 2023 Las Vegas Dealers 2,100 United Auto Workers September 30, 2023 Team Member Engagement, Compensation, Benefits, Development, Safety and Wellbeing We strive to inspire our Team Members through our mission, vision and values, and our Code of Commitment (described below). To evaluate our Team Member experience and our retention efforts, we monitor a number of employee measures, such as turnover rates and Team Member satisfaction. We are revising our Team Member experience surveys to help us further understand the drivers of engagement and areas where we can improve. Our compensation and benefits programs are designed to attract, retain and motivate our Team Members. In addition to competitive salaries and wages, we provide a variety of short-term, long-term and incentive-based compensation programs to reward performance relative to key metrics relevant to our business. We offer comprehensive benefit options including, but not limited to, retirement savings plans, health insurance coverage (including medical, mental health, dental, vision and pharmacy), parental leave and company-paid life insurance. We place utmost importance on creating a safe workplace for our Team Members, embedding procedures so that all our Team Members have the awareness, knowledge and tools to make safe working a habit. We also have maintained a wellness program to help our Team Members improve their health and wellbeing. This program has demonstrated improved health metrics for participating employees and their covered family members helping reduce the cost of healthcare for Team Members and for the Company. We are implementing enhancements and a relaunch in conjunction with the consolidation of our group health plans. In 2020, we sponsored Caesars Cares, a 501(c)(3) charity that provides financial assistance to Team Members in need. Approximately 1,200 grants totaling approximately $1 million were provided to Team Members in 2020, including those impacted by hurricanes in several of the communities in which we operate and the COVID-19 public health emergency. Diversity, Equity and Inclusion We embrace diversity and aim to create an inclusive working environment that celebrates all our Team Members as individuals. Our diversity, equity and inclusion (“DEI”) framework identifies five pillars of activity: advocacy, Team Members, suppliers, communities and guests for a holistic approach to embedding DEI in everything we do. We publish our DEI data in our annual CSR report (described below). In 2020, 44% of leadership roles in the Company were held by women and 40% were held by people of color. In 2021, we set our new goals around gender and racial diversity. By 2025, 50% of leadership roles will be held by women. Furthermore, by 2025, 50% of leadership roles will be held by people of color. COVID-19 Public Health Emergency In 2020, the COVID-19 public health emergency brought unparalleled threats to the health and safety of our Team Members, guests, partners and communities and created unprecedented challenges. Our foremost priority was to protect the health and safety of all those connected to our business while operating in compliance with all applicable guidance, directives and protocols. We have made every effort to alleviate hardship by providing continued pay for up to six weeks for furloughed Team Members, maintaining payment of health insurance premiums for furloughed Team Members, maintaining our employee assistance programs and sponsoring Caesars Cares (see above). In our communities, we donated perishable goods amounting to thousands of meals following the closure of dining facilities at our properties. We also donated funds, and our Team Members volunteered, to help organizations across the United States to support community needs. 11 Corporate Social Responsibility Caesars’s Board of Directors (the “Board”) and senior executives view Corporate Social Responsibility (“CSR”) as an integral element in the way we do business, in the belief that being a good corporate citizen helps protect the company against risk, contributes to improved performance and helps foster positive relationships with all those with whom we connect. The Board and our executive management are committed to being an industry leader in CSR (which includes diversity, equity and inclusion, social impact, and environmental sustainability). In 2020, the Board and our leadership continued to engage with our CEO-level external CSR Advisory Board comprised of experts representing DEI, business strategy, academia and investors, and used their guidance to confirm our CSR priorities. These priorities are reflected in our eleventh annual CSR report, published in 2020 in accordance with Global Reporting Initiative Standards. CSR Committee of the Board Following the Merger in July 2020, Caesars’ Board formed a CSR committee that defines the duties and responsibilities of the Board in supporting delivery of our corporate purpose and CSR strategy as well as CSR-related aspects of corporate governance such as Board diversity. Code of Commitment Caesars is committed to being a responsible corporate citizen and environmental steward through our CSR strategy, PEOPLE PLANET PLAY. This is reflected in our Code of Commitment which is our public pledge to our guests, Team Members, communities, business partners and all those we reach that we will honor the trust they have placed in us through ethical conduct and integrity. We commit to: • PEOPLE: Supporting the wellbeing of our Team Members, guests and local communities. • PLANET: Taking care of the world we all call home. • PLAY: Creating memorable experiences for our guests and leading responsible gaming practices in the industry. PEOPLE PLANET PLAY Strategy Our PEOPLE PLANET PLAY strategy defines how we meet the obligations of our Code of Commitment and is aligned with global priorities articulated by the United Nations as the Sustainable Development Goals. PEOPLE PLANET PLAY establishes multi-year targets in key areas of impact, including science-based greenhouse gas emissions-reduction, formally approved by the Science Based Targets Initiative (“SBTi”), aligning with global best practices on climate change action. We are reviewing our PEOPLE PLANET PLAY targets and expect to publish our targets after our first year as a combined entity. Responsible Gaming For more than thirty years, Caesars has maintained its Responsible Gaming (“RG”) program. We train tens of thousands of Team Members each year and a cadre of RG Ambassadors throughout our properties to identify guests in need of assistance and provide support. In recent years, Caesars has contributed to the National Center for Responsible Gaming, the National Council on Problem Gaming and other state programs to help advance responsible practices in the gaming industry. Environmental Stewardship We take a proactive approach to environmental sustainability through our CodeGreen strategy established by Former Caesars in 2007, consistently improving our performance across energy and greenhouse gas emissions efficiencies, reduction of water consumption and increasing waste diversion from landfills. Caesars recognizes the impact climate change can play both on our business and the guests we serve. Identifying, assessing, and managing the risks and opportunities therefore plays a vital role in our long-term strategic thinking on climate and water, and how we approach our CSR goals. Between 2011 and 2019, Former Caesars reduced its absolute Scope 1 and 2 greenhouse gas (“GHG”) emissions by 19.7%. In 2019, Former Caesars further committed to mitigating its impact on climate change by updating our previously approved science based targets to be in line with well below 2 degrees Celsius per SBTi: (i) reducing absolute Scope 1 and 2 GHG emissions by 35% by 2025, and 100% by 2050 from a 2011 base-year and (ii) having 60% of suppliers by spend institute science-based GHG reduction targets for their operations by 2023. In 2021, we expect to establish a new baseline in order to reaffirm our targets and goals as a combined company. Caesars is pursuing renewable energy sources and low-carbon options, including on site solar developments. Our long-term goals include evaluating energy supply for each of our properties in pursuit of our SBTs. We voluntarily participate in the CDP (formerly the Carbon Disclosure Project), an international nonprofit that drives sustainable economies. In 2020, Caesars made the A List for climate and water security and earned a spot on the Supplier Engagement Leaderboard from CDP. Just 5% of companies assessed by CDP make A List and only 7% make the Supplier Engagement Leaderboard. 12 We are committed to creating and investing in policies and procedures towards CSR efforts. In order to engage guests in our CSR efforts, we have branded our hotel rooms with our PEOPLE PLANET PLAY messaging, inviting guests to play a role by using water, air-conditioning and towels with the environment in mind. We promote sustainable sourcing of key food ingredients for our menus from sustainably managed farms and fisheries. Community Investment Caesars contributes extensively to our local communities to help them develop and prosper, through funding community projects, employee volunteering and cash donations from the Caesars Foundation, a private foundation funded from our operating income. In 2020, the Caesars Foundation contributed $1.3 million to communities across the United States with an emphasis on COVID-19 crisis relief at the local level through food and shelter insecurity, wellness and workforce development programs. The Foundation also continued to support significant national relationships that support diversity equity and inclusion. Many of our community partners are long-term collaborations. For example, our many years of partnership with Meals on Wheels America (“MOWA”) to combat the issues of senior hunger and isolation cumulated in a national virtual summit during Seniors Appreciation Month in 2020 which addressed exponential needs on the issues, particularly given the impact of the COVID-19 public health emergency. From 2018 through 2020, we hosted a national Economic Equity Tour through live webinars and on-line resources for thousands of women of color owned small businesses, and diverse non-profits. Expert-led webinars provided resources in the areas of financial empowerment, nonprofit organization development, and entrepreneurship. Available Information We are required to file annual, quarterly and other current reports and information with the Securities and Exchange Commission (“SEC”). Because we submit filings to the SEC electronically, access to this information is available at the SEC’s website (www.sec.gov). This site contains reports and other information regarding issuers that file electronically with the SEC. We make our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K, and all amendments to these reports, available free of charge on our corporate website ( www.caesars.com/corporate ) as soon as reasonably practicable after such reports are filed with, or furnished to, the SEC. In addition, our Code of Ethics and Business Conduct and charters of the Audit Committee, Compensation Committee, and the Nominating and Corporate Governance Committee are available on our website. We will provide reasonable quantities of electronic or paper copies of filings free of charge upon request. In addition, we will provide a copy of the above referenced charters to stockholders upon request. References in this document to our website address do not incorporate by reference the information contained on the website into this Annual Report on Form 10-K. 13 Item 1A. Risk Factors. Risks Relating to Operating Our Business The outbreak of COVID-19 has impacted our operations and caused an economic downturn, widespread unemployment and an adverse impact on consumer sentiment, and we expect that our business and results of operations will continue to be adversely affected by the impact of COVID-19 for the foreseeable future. On March 13, 2020, in response to the coronavirus public health emergency the U.S. government declared a national state of emergency. In an effort to help control the spread of COVID-19, public health officials imposed or recommended various measures. All of our casino properties were temporarily closed for the period from mid-March 2020 due to orders issued by various government agencies and tribal bodies as part of certain precautionary measures intended to help slow the spread of the COVID-19 public health emergency. See “Item 1 – Business - COVID-19 Public Health Emergency” for further description of the precautionary measures imposed on us and the temporary closure of our casinos. While we began to open our properties beginning in mid-May 2020 and almost all of our properties are currently open, our operations, financial results and cash flows have been, and we expect them to continue to be, affected by social distancing measures, including reduced gaming operations arising from the reconfiguration of our gaming floor, limitations on the number of customers present in our facilities, restrictions on hotel, food and beverage outlets and limits on events that would otherwise attract customers to our properties. COVID-19 has materially adversely affected the economy and financial markets of the United States and the world and has resulted in widespread unemployment in the United States. Consumer demand for casino hotel and racetrack properties such as ours is particularly sensitive to downturns in the economy, unemployment and the associated impact on discretionary spending on leisure activities which bring demand for casino hotel properties such as ours. Reduced customer demand could result in lower occupancy rates, reduced visitation and additional disruptions in our casino business. The impact of COVID-19 on our business remains uncertain. In particular, a delay in wide distribution of a vaccine, or a lack of public acceptance of a vaccine, could lead people to continue to self-isolate and not participate in the economy at pre-pandemic levels for a prolonged period of time. To the extent the U.S. economy and other major global economies experience a recession as a result of COVID-19, our business and operations could be materially adversely affected. The impact of changes in customer demand resulting from the economic downturn, widespread unemployment, reduced consumer confidence and consumer fears on our properties cannot reasonably be determined, but it could be significant and protracted. As a result of the foregoing, we expect that COVID-19 will continue to have a material impact on our business, financial condition, liquidity, results of operations (including revenues and profitability) for an extended period of time. We face substantial competition in the hotel and casino industry, especially in Las Vegas, our largest jurisdiction, and expect that such competition will continue. The gaming industry is highly competitive and competition is intense in most of the markets in which we operate. We compete with a variety of gaming operations, including land-based casinos, dockside casinos, riverboat casinos, casinos located on racing tracks and casinos located on Native American reservations and other forms of legalized gaming such as video gaming terminals (VGTs) at bars, restaurants and truck stops and online gambling and sports betting. We also compete, to a lesser extent, with other forms of legalized gaming and entertainment such as bingo, pull tab games, card parlors, sportsbooks, fantasy sports websites, “cruise-to-nowhere” operations, pari-mutuel or telephonic betting on horse racing and dog racing, state-sponsored lotteries, jai-alai and, in the future, may compete with gaming at other venues. In addition, we compete more generally with other forms of entertainment for the discretionary spending of our customers. In some instances, particularly in the case of Native American casinos, our competitors pay lower taxes or no taxes. In recent years, many casino operators, including us, have reinvested in existing jurisdictions to attract new customers or to gain market share, thereby increasing competition in those jurisdictions. As an example, in response to changing trends, Las Vegas operators have been focused on expanding their non-gaming offerings, including upgrades to hotel rooms, new food and beverage offerings, and new entertainment offerings. The expansion of existing casino entertainment properties, the increase in the number of properties, and the aggressive marketing strategies of many of our competitors have increased competition in many markets in which we operate, and this intense competition is expected to continue. While the long term impact of COVID-19 on these market dynamics remains uncertain, these competitive pressures have and are expected to continue to adversely affect our financial performance. Our brick-and-mortar operations face increasing competition as a result of the expansion of legalized online gaming and betting in a number of the jurisdictions in which we operate. While we believe that we are well positioned to compete with new entrants to the betting and gaming market through online betting and gaming, including through our online betting and gaming 14 offerings, the competitive dynamic is evolving and we cannot assure you that our results of operations will not be adversely impacted by the expansion of legalized online gaming and betting. States that already have legalized casino gaming may further expand gaming, and other states that have not yet legalized gaming may do so in the future. We also compete with Native American gaming operations in California and other jurisdictions where Native American tribes operate large-scale gaming facilities or otherwise conduct gaming activities on Native American lands, which we expect will continue to expand. Further expansion of legalized casino gaming in jurisdictions in or near our markets or changes to gaming laws in states in which we have operations and in states near our operations could increase competition and could adversely affect our operations. Increased competition may require us to make substantial capital expenditures to maintain and enhance the competitive positions of our properties to increase the attractiveness and add to the appeal of our facilities. Because a significant portion of our cash flow is required to pay obligations under our outstanding indebtedness and our lease obligations, there can be no assurance that we will have sufficient funds to undertake, or that we will be able to obtain sufficient financing to fund, such expenditures. If we are unable to make such expenditures, our competitive position could be negatively affected. Our business is sensitive to reductions in discretionary consumer spending as a result of downturns in the economy and other factors outside our control. Consumer demand for casino hotel and racetrack properties such as ours is particularly sensitive to downturns in the economy and the associated impact on discretionary spending on leisure activities. Changes in discretionary consumer spending or consumer preferences brought about by factors such as perceived or actual general economic conditions, effects of declines in consumer confidence in the economy, the impact of high energy and food costs, the increased cost of travel, decreased disposable consumer income and wealth, fears of war and future acts of terrorism, or widespread illnesses or epidemics, including COVID-19, can have a material adverse effect on leisure and business travel, discretionary spending and other areas of economic behavior that directly impact the gaming and entertainment industries in general and could further reduce customer demand for the amenities that we offer. In addition, increases in gasoline prices, including increases prompted by global political and economic instabilities, can adversely affect our operations because most of our patrons travel to our properties by car or on airlines that may pass on increases in fuel costs to passengers in the form of higher ticket prices. Win rates (hold rates) for our casino operations depend on a variety of factors, some of which are beyond our control. The gaming industry is characterized by an element of chance. Accordingly, we employ theoretical win rates to estimate what a certain type of game, on average, will win or lose in the long run. In addition to the element of chance, win rates (hold percentages) are also affected by the spread of table limits and factors that are beyond our control, such as a player’s skill, experience, and behavior, the mix of games played, the financial resources of players, the volume of bets placed, and the amount of time players spend gambling. As a result of the variability in these factors, the actual win rates at our casinos may differ from the theoretical win rates we have estimated and could result in the winnings of our gaming customers exceeding those anticipated. The variability of win rates (hold rates) also have the potential to negatively impact our financial condition, results of operations, and cash flows. We face the risk of fraud, theft, and cheating. We face the risk that gaming customers may attempt or commit fraud or theft or cheat in order to increase winnings. Such acts of fraud, theft, or cheating could involve the use of counterfeit chips or other tactics, possibly in collusion with our employees. Internal acts of cheating could also be conducted by employees through collusion with dealers, surveillance staff, floor managers, or other casino or gaming area staff. Additionally, we also face the risk that customers may attempt or commit fraud or theft with respect to our non-gaming offerings or against other customers. Such risks include stolen credit or charge cards or cash, falsified checks, theft of retail inventory and purchased goods, and unpaid or counterfeit receipts. Failure to discover such acts or schemes in a timely manner could result in losses in our operations. Negative publicity related to such acts or schemes could have an adverse effect on our reputation, potentially causing a material adverse effect on our business, financial condition, results of operations, and cash flows. We extend credit to a portion of our customers, and we may not be able to collect gaming receivables from our credit customers. We conduct our gaming activities on a credit and cash basis at many of our properties. Any such credit we extend is unsecured. Table games players typically are extended more credit than slot players, and high-stakes players typically are extended more credit than customers who tend to wager lower amounts. High-end gaming is more volatile than other forms of gaming, and variances in win-loss results attributable to high-end gaming may have a significant positive or negative impact on cash flow and earnings in a particular period. We extend credit to those customers whose level of play and financial resources warrant, in 15 the opinion of management, an extension of credit. These large receivables could have a significant impact on our results of operations if deemed uncollectible. Gaming debts evidenced by a credit instrument, including what is commonly referred to as a “marker,” and judgments on gaming debts are enforceable under the current laws of the jurisdictions in which we allow play on a credit basis, and judgments on gaming debts in such jurisdictions are enforceable in all U.S. states under the Full Faith and Credit Clause of the U.S. Constitution; however, other jurisdictions may determine that enforcement of gaming debts is against public policy. Although courts of some foreign nations will enforce gaming debts directly and the assets in the U.S. of foreign debtors may be reached to satisfy a judgment, judgments on gaming debts from U.S. courts are not binding on the courts of many foreign nations. In addition, in November 2017, the Chinese government adopted new rules to control the cross-border transportation of cash and bearer negotiable instruments, specifically to reduce the international transfer of cash in connection with activities that are illegal in China, including gambling. The Chinese government has recently taken steps to prohibit the transfer of cash for the payment of gaming debts. These developments may have the effect of reducing the collectability of gaming debts of players from China. It is unclear whether these and other measures will continue to be in effect or become more restrictive in the future. These and any future foreign currency control policy developments that may be implemented by foreign jurisdictions could significantly impact our business, financial condition and results of operations. Compromises of our information systems or unauthorized access to confidential information or our customers’ personal information could materially harm our reputation and business. We collect and store confidential, personal information relating to our customers for various business purposes, including marketing and financial purposes, and credit card information for processing payments. For example, we handle, collect and store personal information in connection with our customers staying at our hotels and enrolling in Caesars Rewards. We may share this personal and confidential information with vendors or other third parties in connection with processing of transactions, operating certain aspects of our business, or for marketing purposes. Our collection and use of personal data are governed by state and federal privacy laws and regulations as well as the applicable laws and regulations in other countries in which we operate. Privacy law is subject to frequent changes and varies significantly by jurisdiction. We may incur significant costs in order to ensure compliance with the various applicable privacy requirements. In addition, privacy laws and regulations may limit our ability to market to our customers. We assess and monitor the security of collection, storage, and transmission of customer information on an ongoing basis. We utilize commercially available software and technologies to monitor, assess and secure our network. Further, some of the systems currently used for transmission and approval of payment card transactions and the technology utilized in payment cards themselves, all of which can put payment card data at risk, are determined and controlled by the payment card industry, and other such systems are determined and controlled by us. Although we have taken steps designed to safeguard our customers’ confidential personal information and important internal company data, our network and other systems and those of third parties, such as service providers, could be compromised, damaged, or disrupted by a third-party breach of our system security or that of a third-party provider or as a result of purposeful or accidental actions of third parties, our employees, or those employees of a third party, power outages, computer viruses, system failures, natural disasters, or other catastrophic events. Our third-party information system service providers face risks relating to cybersecurity similar to ours, and we do not directly control any of such parties’ information security operations. Advances in computer and software capabilities, encryption technology, new tools, and other developments may increase the risk of a security breach. As a result of any security breach, customer information or other proprietary data may be accessed or transmitted by or to a third party. Despite the measures we have implemented to safeguard our information, there can be no assurance that we are adequately protecting our information. Any loss, disclosure of, misappropriation of, or access to customers’ or other proprietary information or other breach of our information security could result in legal claims or legal proceedings, including regulatory investigations and actions, or liability for failure to comply with privacy and information security laws, including for failure to protect personal information or for misusing personal information, which could disrupt our operations, damage our reputation, and expose us to claims from customers, financial institutions, regulators, payment card associations, employees, and other persons, any of which could have an adverse effect on our financial condition, results of operations, and cash flow. We have cybersecurity insurance to respond to a breach which is designed to cover expenses around notification, credit monitoring, investigation, crisis management, public relations and legal advice. We also carry other insurance which may cover ancillary aspects of the event; however, damage and claims arising from a breach may not be completely covered or may exceed the amount of any insurance available. 16 Our reliance on our computer systems and software could expose us to great financial harm if any of our computer systems or software were subject to any material disruption or corruption. We rely significantly on our computer systems and software to receive and properly process internal and external data, including data related to Caesars Rewards. A disruption or corruption of the proper functioning of our computer systems or software could cause us to lose data or record erroneous data, which could result in material losses. We cannot guarantee that our efforts to maintain competitive computer systems and software will be successful. Our computer systems and software may fail or be subject to bugs or other errors, resulting in service interruptions or other unintended consequences. If any of these risks materialize, they could have a material adverse effect on our business, financial condition, and results of operations Acts of terrorism, war, natural disasters, severe weather, and political, economic and military conditions may impede our ability to operate or may negatively impact our financial results. Terrorist attacks and other acts of war or hostility have created many economic and political uncertainties. For example, a substantial number of the customers of our properties in Las Vegas use air travel. As a result of terrorist acts that occurred on September 11, 2001, domestic and international travel was severely disrupted, which resulted in a decrease in customer visits to our properties in Las Vegas. Visitation to Las Vegas also declined for a period of time following the mass shooting tragedy on October 1, 2017. We cannot predict the extent to which disruptions in air or other forms of travel as a result of any further terrorist act, security alerts or war, uprisings, or hostilities in places such as Iraq, Afghanistan, and/or Syria or other countries throughout the world, and governmental responses to those acts or hostilities, will directly or indirectly impact our business and operating results. For example, our operations in Cairo, Egypt, were negatively affected from the uprising there in January 2011. As a consequence of the threat of terrorist attacks and other acts of war or hostility in the future, premiums for a variety of insurance products have increased, and some types of insurance are no longer available. If any such event were to affect our properties, we would likely be adversely affected. In addition, natural and man-made disasters such as major fires, floods, severe snowstorms, hurricanes, earthquakes, and oil spills could also adversely impact our business and operating results. Such events could lead to the loss of use of one or more of our properties for an extended period of time and disrupt our ability to attract customers to certain of our gaming facilities. For example, our property in Lake Charles, Louisiana has been closed since August 27, 2020 due to damage resulting from Hurricane Laura. Inadequate insurance or lack of available insurance for these and other certain types or levels of risk could expose us to significant losses in the event that a catastrophe occurred for which we are underinsured. In most cases, we have insurance that covers portions of any losses from a natural disaster, but it is subject to deductibles and maximum payouts in many cases. Although we may be covered by insurance from a natural disaster, the timing of our receipt of insurance proceeds, if any, may be out of our control. In some cases, however, we may receive no proceeds from insurance. Further, if properties subject to our leases with VICI and GLPI are impacted by a casualty event, such leases require us to repair or restore the affected properties even if the cost of such repair or restoration exceeds the insurance proceeds that we receive. Under such circumstances, the rent under such leases is required to be paid during the period of repair or restoration even if all or a portion of the affected property is not operating. In addition to the damage caused to our properties by a casualty loss, we may suffer business disruption as a result of the casualty event or be subject to claims by third parties that may be injured or harmed. While we carry general liability insurance and business interruption insurance, there can be no assurance that insurance will be available or adequate to cover all loss and damage to which our business or our assets might be subjected and the timing and receipt of insurance proceeds, if any, may be out of our control. Our business may be subject to seasonal fluctuations that could result in volatility and have an adverse effect on our operating results. Our business may be subject to some degree of seasonality. Weather conditions may deter or prevent customers from reaching the facilities or undertaking trips. Such conditions would particularly affect customers who are traveling longer distances to visit our properties. Seasonality may cause our properties working capital cash flow requirements to vary from quarter to quarter depending on the variability in the volume and timing of sales. Business in our properties can also fluctuate due to specific holidays or other significant events, such as Easter (particularly when the holiday falls in a different quarter than the prior year), the World Series of Poker tournament (with respect to our Las Vegas properties), city-wide conventions, a large sporting event or a concert, or visits by our premium players. We also believe that any seasonality, holiday, or other significant event may affect our various properties or regions differently. These factors, among other things, make forecasting more difficult and may adversely affect our properties’ ability to manage working capital and to predict financial results accurately, which could adversely affect our business, financial condition, and operating results. Our business is particularly sensitive to energy prices and a rise in energy prices could harm our operating results. We are a large consumer of electricity and other energy and, therefore, higher energy prices may have an adverse effect on our results of operations. Accordingly, increases in energy costs may have a negative impact on our operating results. Additionally, 17 higher electricity and gasoline prices that affect our customers may result in reduced visitation to our resorts and a reduction in our revenues. We may be indirectly impacted by regulatory requirements aimed at reducing the impacts of climate change directed at up-stream utility providers, as we could experience potentially higher utility, fuel, and transportation costs. Any deterioration in our reputation or the reputation of our brands could adversely impact our business, financial condition, or results of operations. Our business is dependent on the quality and reputation of our Company and brands. Events beyond our control could affect the reputation of one or more of our properties or more generally impact our corporate or brand image. Other factors that could influence our reputation include the quality of the services we offer and our actions with regard to social issues such as diversity, human rights and support for local communities. Broad access to social media makes it easy for anyone to provide public feedback that can influence perceptions of us, our brands or our properties. It may be difficult to control or effectively manage negative publicity, regardless of whether it is accurate. Negative events and publicity could quickly and materially damage perceptions of us, our brands or our properties, which, in turn, could adversely impact our business, financial condition or results of operations through loss of customers, loss of business opportunities, lack of acceptance of our company to operate in host communities, employee retention or recruiting difficulties or other difficulties. Risks related to Human Capital We rely on our key personnel and we may face difficulties in attracting and retaining qualified employees for our casinos and race tracks. Our future success will depend upon, among other things, our ability to keep our senior executives and highly qualified employees. The operation of our business requires, qualified executives, managers and skilled employees with gaming and horse racing industry experience and qualifications who are able to obtain the requisite licenses and approval from the applicable gaming authorities. We compete with other potential employers for employees, and we may not succeed in hiring or retaining the executives and other employees that we need. A sudden loss of or inability to replace key employees could have a material adverse effect on our business, financial condition and results of operations. Moreover, there has from time to time been a shortage of skilled labor in our markets and the continued expansion of gaming near our facilities, including the expansion of Native American gaming and internet betting and gaming, may make it more difficult for us to attract qualified candidates. While we believe that we will continue to be able to attract and retain qualified employees, shortages of skilled labor will make it increasingly difficult and expensive to attract and retain the services of a satisfactory number of qualified employees, and we may incur higher costs than expected as a result. Work stoppages and other labor problems could negatively impact our future profits. As of December 31, 2020, we had collective bargaining agreements covering approximately 21,000 employees. A lengthy strike or other work stoppages at any of our casino properties could have an adverse effect on our business and results of operations. From time to time, we have also experienced attempts by labor organizations to organize certain of our non-union employees. These efforts have achieved some success to date. We cannot provide any assurance that we will not experience additional and successful union activity in the future. The impact of this union activity is undetermined and could negatively impact our results of operations. We cannot assure you that we will be able to retain our performers and other entertainment offerings on acceptable terms or at all. While our ability to offer live performances has been limited due to COVID-19, historically our performers have drawn customers to our properties and have been a significant source of our revenue. We cannot assure you that we will be able to retain our performers or other shows on acceptable terms or at all. In addition, the third parties that we depend on for our properties’ entertainment offerings may become incapable or unwilling to provide their services at the level agreed upon or at all. Risks Relating to Our Capital Structure Our substantial indebtedness and the fact that a significant portion of our cash flow is used to make interest payments and rent payments under our lease agreements could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry and prevent us from making debt service payments and rent payments. 18 As of December 31, 2020 we had $15.0 billion of outstanding face value indebtedness, in addition to leases with VICI and GLPI that require an annual rent payment of $1.1 billion in 2021 and that are subject to annual escalation. See Note 10 for a description of our obligations under our leases with VICI and GLPI and Note 12 for details regarding our debt outstanding and related restrictive covenants. As a result, a significant portion of our cash flow is applied to make interest payments with respect to our outstanding debt and payments under our leases. These financial obligations may have important negative consequences for us, including: • limiting our ability to use operating cash flow in other areas of our business because we must dedicate a significant portion of these funds to make payments on our debt and lease obligations; • increasing our vulnerability to the COVID-19 pandemic and general adverse economic and industry conditions; • limiting our flexibility in planning for, or reacting to, changes in our businesses and the markets in which we operate; • placing us at a competitive disadvantage compared to competitors with debt and rent obligations that are less than ours; • increasing our vulnerability to, and limiting our ability to react to, changing market conditions, changes in our industry and economic downturns; • limiting our ability to obtain additional financing to fund working capital requirements, capital expenditures, debt service, acquisitions, general corporate or other obligations; • subjecting us to a number of restrictive covenants that, among other things, require us to make capital expenditures and limit our ability to pay dividends and distributions, make acquisitions and dispositions, borrow additional funds and make other investments; • exposing us to interest rate risk due to the variable interest rate on borrowings under our credit facilities; and • affecting our ability to renew gaming and other licenses necessary to conduct our business. Despite our current indebtedness levels, we and our subsidiaries may still incur significant additional indebtedness. Incurring more indebtedness could increase the risks associated with our substantial indebtedness. We and our subsidiaries may be able to incur substantial additional indebtedness, including additional secured indebtedness, and may enter into financing obligations similar to our leases with VICI and GLPI in the future. As of December 31, 2020, we had $2.2 billion of borrowing capacity under our revolving credit facilities, before consideration of $19 million in outstanding letters of credit under CEI Revolving Credit Facility and $65 million in outstanding letters of credit under CRC Revolving Credit Facility. Further, our existing debt agreements currently permit, and we expect that agreements governing debt that we incur in the future will permit, us to incur certain other additional secured and unsecured debt. Further, we may incur other liabilities that do not constitute indebtedness. The risks that we face based on our outstanding indebtedness may intensify if we incur additional indebtedness or financing obligations in the future. The LIBOR calculation method may change and LIBOR is expected to be phased out after 2021. Our credit facilities calculate interest on the outstanding principal balance using LIBOR. On July 27, 2017, the United Kingdom Financial Conduct Authority (the “FCA”) announced it would phase out LIBOR as a benchmark by the end of 2021. In the meantime, actions by the FCA, other regulators or law enforcement agencies may result in changes to the method by which LIBOR is calculated. At this time, it is not possible to predict the effect on our financial condition, results of operations and cash flows of any such changes or any other reforms to LIBOR that may be enacted in the United Kingdom or elsewhere. A significant portion of our casinos are located on leased property. If we default on one or more leases, the applicable lessors could terminate the affected leases and we could lose possession of the affected casino. We currently lease certain parcels of land on which a significant portion of our properties are located. As a ground lessee, we have the right to use the leased land; however, we do not hold fee ownership of the underlying land. Accordingly, we have no interest in the leased land or improvements thereon at the expiration of the ground leases. If our use of the land underlying our casino properties is disrupted permanently or for a significant period of time, then the value of our assets could be impaired and our business and operations could be adversely affected. Our leases provide that they may be terminated for a number of reasons, including failure to pay rent, taxes or other payment obligations or the breach of other covenants contained in the leases. In particular, our leases with GLPI and VICI require annual rent payments of at least $1.1 billion in 2021, which is subject to escalation annually, and obligate us to make specified minimum capital expenditures with respect to the leased properties. If our business and properties fail to generate sufficient earnings, the payments required to service the rent obligations under our leases with GLPI and VICI could materially and adversely limit our ability to react to changes in our business and make acquisitions and investments in our properties. If we were to default on any one or more of these leases, the applicable lessors could terminate the affected leases and we could lose possession of the affected land and any improvements on the land, including the hotels and casinos. A termination of our ground leases or our leases with GLPI or VICI could result in a default under our debt agreements and could have a material adverse effect on our business, financial condition and results 19 of operations. Further, in the event that any lessor of our leased properties, including GLPI or VICI, encounters financial, operational, regulatory or other challenges, there can be no assurance that such lessor will be able to comply with its obligations under the applicable lease. Certain of our leases, including our leases with GLPI and VICI, are “triple-net” leases. Accordingly, in addition to rent, we are required to pay, among other things, the following: (1) lease payments to the underlying ground lessor for properties that are subject to ground leases; (2) facility maintenance costs; (3) all insurance premiums for insurance with respect to the leased properties and the business conducted on the leased properties; (4) taxes levied on or with respect to the leased properties (other than taxes on the income of the lessor); and (5) all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties. We are responsible for incurring the costs described in the preceding sentence notwithstanding the fact that many of the benefits received in exchange for such costs shall in part accrue to the lessor as the owner of the associated facilities. In addition, we remain obligated for lease payments and other obligations under our leases with GLPI and VICI and other ground leases even if one or more of such leased facilities is unprofitable or if we decide to withdraw from those locations. We could incur special charges relating to the closing of such facilities including lease termination costs, impairment charges and other special charges that would reduce our net income and could have a material adverse effect on our business, financial condition and results of operations. Legal and Regulatory Risks We are subject to extensive governmental regulation, taxation policies and licensing, and gaming authorities have significant control over our operations, which could have an adverse effect on our business. Licensing Requirements . The ownership and operation of casino gaming, online betting and gaming, riverboat and horse racing facilities are subject to extensive federal, state and local regulation, and regulatory authorities at local, state and national levels have broad powers with respect to the licensing of gaming businesses. We currently hold all state and local licenses and related approvals necessary to conduct our present gaming operations, but we must periodically apply to renew many of our licenses and registrations. We cannot assure you that we will be able to obtain such renewals. Any failure to maintain or renew our existing licenses, registrations, permits or approvals would have a material adverse effect on us. Furthermore, if additional laws or regulations are adopted or existing laws or regulations are amended or interpreted differently, these regulations could impose additional restrictions or costs that could have a significant adverse effect on us. Gaming authorities with jurisdiction over our operations may, in their discretion, require the holder of any securities issued by us to file applications, be investigated, and be found suitable to own our securities, and, if a holder is found unsuitable, we can be sanctioned, including the loss of approvals that are required for us to continue our gaming operations in the relevant jurisdictions, if such unsuitable person does not timely sell our securities. Our officers, directors and key employees are also subject to similar findings of unsuitability and the gaming authorities may require us to terminate the employment of any person who refuses to file appropriate applications. See “Item 1 - Gaming Licenses and Governmental Regulations” and Exhibit 99.1 for further description of the regulations to which we are subject. The results of findings of unsuitability could materially adversely affect our gaming operations. Applicable gaming laws and regulations restrict our ability to issue securities, incur debt and undertake other financing activities. Such transactions would generally require approval of applicable gaming authorities, and our financing counterparties, including lenders, might be subject to various licensing and related approval procedures in the various jurisdictions in which we operate gaming facilities. Compliance with Other Laws . We are also subject to a variety of other federal, state and local laws, rules, regulations and ordinances that apply to non-gaming businesses, including restrictions enacted in response to COVD-19, zoning, environmental, construction and land-use laws and regulations governing smoking and the serving of alcoholic beverages. Our operations have been adversely impacted by regulations enacted to limit the spread of COVID-19. In addition, legislation in various forms to ban indoor tobacco smoking has been enacted or introduced in many states and local jurisdictions, including several of the jurisdictions in which we operate. If additional restrictions are enacted in our jurisdictions, we could experience a significant decrease in gaming revenue and operating results at our properties and, particularly if such restrictions are not applicable to all competitive facilities in that gaming market, our business could be materially adversely affected. The likelihood or outcome of similar legislation in other jurisdictions and referendums in the future cannot be predicted, though any additional limitations on our operations would be expected to negatively impact our financial performance. Regulations adopted by FINCEN require us to report currency transactions in excess of $10,000 occurring within a gaming day. U.S. Treasury Department regulations also require us to report certain suspicious activity, including any transaction that exceeds $5,000, if we know, suspect or have reason to believe that the transaction involves funds from illegal activity or is designed to evade federal regulations or reporting requirements. Substantial penalties can be imposed if we fail to comply with these regulations. FINCEN has recently increased its focus on gaming companies. 20 We are required to report certain customer’s gambling winnings via form W-2G to comply with current Internal Revenue Service regulations. Should these regulations change, we would expect to incur additional costs to comply with the revised reporting requirements. Taxation and Fees . In addition, gaming companies are generally subject to significant revenue-based taxes and fees in addition to normal federal, state and local income taxes, and such taxes and fees are subject to increase at any time. We pay substantial taxes and fees with respect to our operations. Tax laws are dynamic and subject to change as new laws are passed and new interpretations of the law are issued or applied, affecting the gaming industry. The large number of state and local governments with significant current or projected budget deficits makes it more likely that those governments that currently permit gaming will seek to fund such deficits with new or increased gaming taxes and/or property taxes and worsening economic conditions could intensify those efforts. Any material increase, or the adoption of additional taxes or fees, could have a material adverse effect on our future financial results. We expect to expand our sportsbook business and engage in online sportsbook, casino gaming and poker. There can be no assurance that regulations authorizing such activities will be approved in the jurisdictions in which we operate or that the market for such gaming activities will develop as expected. During the second quarter of 2018, the U.S. Supreme Court overturned the federal ban on sports betting. As a result, several jurisdictions in which we operate legalized sports betting and additional jurisdictions may do so in the future. We have entered into 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 and we currently have relationships with (i) William Hill pursuant to which William Hill has agreed to operate as our sports betting operator, including with respect to mobile and online sports wagering, for a period of 25 years, (ii) the Stars Group Inc. (“TSG”) pursuant to which we agreed to provide TSG with options to obtain access to certain of our licenses for online sports wagering and real money online gaming and poker, for a period of 20 years, (iii) various sports brands including NFL and ESPN, for limited events, and (iv) other online betting and gaming operators. See “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Partnerships and Acquisitions” for a further description of the arrangements with William Hill, TSG, and additional sports brands. Currently William Hill operates 37 sportsbooks at our properties in eight states and, following the acquisition, Caesars and William Hill will be live with sports wagering across 15 U.S. states plus the district of Columbia. However, our ability to further expand our sports betting and online operations is dependent on adoption of regulations permitting sports betting in the United. There can be no assurances when, or if, any such regulations will be adopted, or the terms of such regulations, in certain of the jurisdictions in which we operate. The market for sports betting and online gaming is rapidly evolving and highly competitive with an increasing number of competitors. The success of our sportsbook and online betting and gaming partners, our interest in William Hill and TSG and the results of operations from sports betting and online sportsbook and gaming conducted at our properties or under the authority of our licenses are dependent on a number of factors that are beyond our control, including: • the timing of adoption of regulations authorizing such betting and gaming activities and the restrictions contained in such regulations; • the tax rates and license fees applicable to such activities; • our ability to gain market share in a newly developing market; • the potential that the market does not develop at all or does not develop as we anticipate; • our ability to compete with new entrants in the market; • changes in consumer demographics and public tastes and preferences; and • the availability and popularity of other forms of entertainment. There can be no assurance as to the returns that we will receive from our current and anticipated sports betting and online gaming operations or our other relationships that we have granted rights to market access or future similar arrangements with other market service providers. We may not be able to protect the intellectual property rights we own or may be prevented from using intellectual property necessary for our business. The development of intellectual property is part of our overall business strategy, and we regard our intellectual property to be an important element of our success. We rely primarily on trade secret, trademark, domain name, copyright, and contract law to protect the intellectual property and proprietary technology we own. We also actively pursue business opportunities in the United States and in international jurisdictions involving the licensing of our trademarks to third parties. It is possible that third parties may copy or otherwise obtain and use our intellectual property or proprietary technology without authorization or otherwise infringe on our rights. For example, while we have a policy of entering into confidentiality, intellectual property invention assignment, and/or non-competition and non-solicitation agreements or restrictions with our employees, independent 21 contractors, and business partners, such agreements may not provide adequate protection or may be breached, or our proprietary technology may otherwise become available to or be independently developed by our competitors. The laws of some foreign countries may not protect proprietary rights or intellectual property to as great an extent as do the laws of the United States. Despite our efforts to protect our proprietary rights, the unauthorized use or reproduction of our trademarks could diminish the value of our trademarks and our market acceptance, competitive advantages, or goodwill, which could adversely affect our business. Third parties have alleged and may in the future allege that we are infringing, misappropriating, or otherwise violating their intellectual property rights. Third parties may initiate litigation against us without warning or may send us letters or other communications that make allegations without initiating litigation. We may elect not to respond to these letters or other communications if we believe they are without merit, or we may attempt to resolve these disputes out of court by negotiating a license, but in either case it is possible that such disputes will ultimately result in litigation. Any such claims could interfere with our ability to use technology or intellectual property that is material to the operation of our business. Such claims may be made by competitors seeking to obtain a competitive advantage or by other parties, such as entities that purchase intellectual property assets for the purpose of bringing infringement claims. We also periodically employ individuals who were previously employed by our competitors or potential competitors, and we may therefore be subject to claims that such employees have used or disclosed the alleged trade secrets or other proprietary information of their former employers. At any time, we may have to rely on litigation to enforce our intellectual property rights, protect our trade secrets, determine the validity and scope of the proprietary rights of others, or defend against claims of infringement or invalidity. Any such litigation, whether successful or unsuccessful, could result in substantial costs and the diversion of resources and the attention of management. If unsuccessful, such litigation could result in the loss of important intellectual property rights, require us to pay substantial damages, subject us to injunctions that prevent us from using certain intellectual property, require us to make admissions that affect our reputation in the marketplace, and require us to enter into license agreements that may not be available on favorable terms or at all. Finally, even if we prevail in any litigation, the remedy may not be commercially meaningful or fully compensate us for the harm we suffer or the costs we incur. Any of the foregoing could have a material adverse effect on our business, financial condition and results of operations. We are or may become involved in legal proceedings that, if adversely adjudicated or settled, could impact our business and financial condition. From time to time, we are named in lawsuits or other legal proceedings relating to our respective businesses. Some of these matters involve commercial or contractual disputes, intellectual property claims, legal compliance, personal injury claims, and employment claims. As with all legal proceedings, no assurances can be given as to the outcome of these matters. Moreover, legal proceedings can be expensive and time consuming, and we may not be successful in defending or prosecuting these lawsuits, which could result in settlements or damages that could significantly impact our business, financial condition and results of operations. Risks Relating to the Completion of the Merger and the WH Acquisition and the Integration of the Company and Former Caesars and William Hill We may fail to consummate the WH Acquisition or may not consummate it on the terms described herein. 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 of approximately £2.9 billion, or $3.7 billion (the “WH Acquisition”). While we received the approval of William Hill plc shareholders and obtained the early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”), the WH Acquisition remains subject to gaming regulatory approvals . See “ The WH Acquisition is subject to the receipt of governmental approvals that may impose conditions that could have an adverse effect on us or, if not obtained, could prevent consummation of the WH Acquisition. ” As a result, the possible timing and likelihood of the completion of the WH Acquisition are uncertain, and, accordingly, there can be no assurance that such acquisition will be completed on the expected terms, anticipated schedule or at all. In the event that we fail to consummate the WH Acquisition, we will have issued a significant number of additional shares of common stock and we will not have acquired the revenue generating assets that will be required to produce the earnings and cash flow we anticipated. As a result, failure to consummate the WH Acquisition would adversely affect our earnings per share and our ability to make distributions to stockholders. If the WH Acquisition is not consummated, we could be subject to a number of risks that may adversely affect our business and the market price of our common stock, including: 22 • we will be required to pay costs relating to the WH Acquisition, such as legal, accounting, financial advisory and printing fees, whether or not the WH Acquisition is consummated; • time and resources committed by our management to matters relating to the WH Acquisition could otherwise have been devoted to pursuing other beneficial opportunities; • the market price of our common stock could decline to the extent that the current market price reflects a market assumption that the WH Acquisition will be consummated; and • we would not realize the benefits we expect to realize from consummating the WH Acquisition. Any increased costs associated with the delay or abandonment of the WH Acquisition, in addition to the impact of COVID-19, may adversely impact our ability to remain in compliance with our covenants contained in the agreements governing our indebtedness and lease obligations, and our liquidity. Moreover, if the WH Acquisition is not consummated, our reputation in our industry and in the investment community could be damaged, and the market price of our common stock could decline. The WH Acquisition is subject to the receipt of governmental approvals that may impose conditions that could have an adverse effect on us or, if not obtained, could prevent consummation of the WH Acquisition. Consummation of the WH Acquisition remains subject to gaming regulatory approvals , including, without limitation, including, among others, the Gaming Board For the Bahamas, Indiana Gaming Commission, Nevada Gaming Control Board and Gaming Commission, and New Jersey Division of Gaming Enforcement. Additionally, the combination requires the English High Court's final approval and administrative and post-closing approvals from other US and international agencies. There can be no assurance that these approvals will be obtained and that the other conditions to consummating the WH Acquisition will be satisfied. In addition, the governmental authorities from which the regulatory approvals are required may impose conditions on the consummation of the WH Acquisition or require changes to the terms of the WH Acquisition or agreements to be entered into in connection with the WH Acquisition. Such conditions or changes and the process of obtaining regulatory approvals could have the effect of delaying or impeding consummation of the WH Acquisition or of imposing additional costs or limitations on us following consummation of the WH Acquisition, any of which might have an adverse effect on our business, financial condition and results of operations. The integration of the Company and Former Caesars and William Hill may present significant challenges. We cannot be sure that we will be able to realize the anticipated benefits of the Merger and the WH Acquisition in the anticipated time frame or at all. Our ability to realize the anticipated benefits of the Merger and the WH Acquisition will significantly depends on our ability to integrate the businesses of Former Caesars and William Hill into the Company in the anticipated time frame or at all. The combination of independent businesses is a complex, costly and time-consuming process. As a result, we are required to devote significant management attention and resources to integrating the business practices and operations of Former Caesars into those of the Company and we expect that our acquisition of William Hill will present similar challenges. The integration process may disrupt the businesses and, if implemented ineffectively or inefficiently, would preclude realization of the full benefits expected by us. The failure to successfully integrate Former Caesars and William Hill into the Company and to manage the challenges presented by the integration process successfully may result in an interruption of, or loss of momentum in, the business of the Company, which may have the effect of depressing the market price of our common stock. Cautionary Statement Regarding Forward-Looking Information This Annual Report on Form 10-K 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, trends 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 COVID-19 on our business and financial condition; • projections of future results of operations or financial condition; • our ability to consummate the acquisition of William Hill and the announced dispositions of certain of our properties, including required divestitures of certain properties located in Indiana and MontBleu; 23 • 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 markets 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 intention to pursue development opportunities and additional acquisitions and divestitures; • our ability to realize the anticipated benefits of the acquisition of Former Caesars, William Hill and future development, acquisition and partnership opportunities; and • the impact of regulation on our business and our ability to receive and maintain necessary approvals for our existing properties and future projects and operation of online sportsbook, poker and gaming. Any forward-looking statements are based upon underlying assumptions, including any assumptions mentioned with the specific statements, as of the date such statements were made. Such assumptions 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. Actual results and trends may differ materially from any future results, trends, performance or achievements expressed or implied by such statements. Forward-looking statements speak only as of the date they are made, and we assume no duty to update forward-looking statements. Forward-looking statements should not be regarded as a representation by us or any other person that the forward-looking statements will be achieved. Undue reliance should not be placed on any forward-looking statements. Some of the contingencies and uncertainties to which any forward-looking statement contained herein are subject include, but are not limited to, the following: • the extent and duration of the impact of COVID-19 on the Company’s business, financial results and liquidity; • the impact and cost of, and our ability to adapt to, evolving operating procedures in response to continued developments with COVID-19; • the impact of actions we have undertaken to reduce costs and improve efficiencies to mitigate losses as a result of the COVID-19 public health emergency, which could negatively impact guest loyalty and our ability to attract and retain our employees; • the impact of the COVID-19 public health emergency and resulting unemployment and changes in general economic conditions on discretionary consumer spending and customer demand; • our substantial indebtedness and significant financial commitments, including our obligations under our lease arrangements, could adversely affect our results of operations and our ability to service such obligations, react to changes in our markets and pursue development and acquisition opportunities; • restrictions and limitations in agreements governing our debt and leased properties could significantly affect our ability to operate our business and our liquidity; • risks relating to payment of a significant portion of our cash flow as debt service and rent under the leases of our casino properties with VICI and GLPI; • financial, operational, regulatory or other potential challenges that may arise as a result of leasing of a number of our properties; • our ability to adapt to the very competitive environments we operate in as we face increasing competition, including through legalization of online betting and gaming; • uncertainty regarding the expansion of online betting and gaming, including the impact of such expansion on our brick-and-mortar business and our ability to compete in the online market; 24 • the ability to identify suitable acquisition opportunities and realize growth and cost synergies from any future acquisitions; • the impact of governmental regulation on our business and the cost of complying or the impact of failing to comply with such regulations; • changes in gaming taxes and fees in jurisdictions in which we operate; • risks relating to pending claims or future claims that may be brought against us; • changes in interest rates and capital and credit markets; • our ability to comply with certain covenants in our debt documents and lease arrangements; • our ability to collect gaming receivables from our credit customers; • the effect of disruptions or corruption to our information technology and other systems and infrastructure; • the effect of seasonal fluctuations; • our particular sensitivity to energy prices; • deterioration in our reputation or the reputation of our brands; • our ability to attract and retain customers; • our ability to protect the intellectual property rights we own; • our ability to expand our sportsbook business and engage in online sportsbook, casino gaming and poker; • weather or road conditions limiting access to our properties; • the effect of war, terrorist activity, acts of violence, natural disasters, public health emergencies and other catastrophic events; • the intense competition to attract and retain management and key employees in the gaming industry; and • Other factors described in Part II, Item 1A. “Risk Factors” contained herein and our reports on Form 10-Q and Form 8-K filed with the SEC. In addition, the acquisition of William Hill and the announced dispositions of certain of our properties, including required divestitures, create additional risks, uncertainties and other important factors, including but not limited to: • the possibility that the proposed transactions are not consummated when expected or at all because required regulatory or other approvals are not received or other conditions to the consummation thereof are not satisfied on a timely basis or at all; • the possibility that one or more of such transactions do not close on the terms described herein or that we are required to modify aspects of one or more of such transactions to obtain, or otherwise take action to satisfy conditions imposed in connection with, required regulatory approvals; • risks associated with increased leverage as a result of the proposed acquisition of William Hill; • the possibility that the anticipated benefits of the proposed transactions are not realized when expected or at all; • the incurrence of significant transaction and acquisition-related costs and the possibility that the transactions may be more expensive to complete than expected; • competitive responses to the proposed transactions; • legislative, regulatory and economic developments; • the ability to retain certain of our key employees and William Hills’ key employees; • the outcome of legal proceedings that may be instituted as a result of the proposed transactions; 25 • the impact of the proposed transactions, or the failure to consummate the proposed transactions, on our stock price; • diversion of management’s attention from our ongoing operations; • the impact of the announcement or consummation of the proposed transactions on the Company’s relationships with third parties, which may make it more difficult to maintain business relationships; and • other risks and uncertainties described in Part II, Item 1A. “Risk Factors” contained herein and our reports on Form 10-K, Form 10-Q and Form 8-K filed with the SEC. In light of these and other risks, uncertainties and assumptions, the forward-looking events discussed in this report might not occur. These forward-looking statements speak only as of the date on which this statement is made, even if subsequently made available on our website or otherwise, and we do not intend to update publicly any forward-looking statement to reflect events or circumstances that occur after the date on which the statement is made, except as may be required by law. You should also be aware that while we from time to time communicate with securities analysts, we do not disclose to them any material non-public information, internal forecasts or other confidential business information. Therefore, you should not assume that we agree with any statement or report issued by any analyst, irrespective of the content of the statement or report. To the extent that reports issued by securities analysts contain projections, forecasts or opinions, those reports are not our responsibility and are not endorsed by us. Item 1B. Unresolved Staff Comments. None. Item 2. Properties. As of December 31, 2020, the following are our properties, including those that were sold during the year. All amounts are approximations. Property Location Casino Space– Sq. Ft. Slot Machines Table Games Hotel Rooms and Suites Las Vegas Segment Owned-Domestic Bally’s Las Vegas (a) Las Vegas, NV 68,400 890 70 2,810 The Cromwell (a) Las Vegas, NV 41,600 350 50 190 Flamingo Las Vegas (a) Las Vegas, NV 72,300 1,090 90 3,450 The LINQ Hotel & Casino (a) Las Vegas, NV 36,300 710 50 2,240 Paris Las Vegas (a) Las Vegas, NV 95,300 950 100 2,920 Planet Hollywood Resort & Casino (a) Las Vegas, NV 64,500 1,070 110 2,500 Leased Caesars Palace Las Vegas (a) Las Vegas, NV 124,200 1,560 170 3,970 Harrah’s Las Vegas (a) Las Vegas, NV 88,800 1,310 90 2,540 Rio All-Suite Hotel & Casino (a) Las Vegas, NV 117,300 1,050 70 2,520 Regional Segment Owned-Domestic Circus Circus Reno Reno, NV 63,100 350 — 1,570 Eldorado Gaming Scioto Downs Columbus, OH 142,000 2,160 — — Eldorado Resort Casino Reno Reno, NV 71,500 790 30 810 Eldorado Resort Casino Shreveport (b) Shreveport, LA 28,900 810 30 400 Grand Victoria Casino Elgin, IL 36,700 1,090 30 — Hoosier Park (a) Anderson, IN 55,300 1,480 30 — Indiana Grand (a) Shelbyville, IN 80,100 1,090 60 — Isle of Capri Casino Boonville Boonville, MO 26,000 860 20 140 Isle of Capri Casino Hotel Lake Charles (c) Westlake, LA 26,200 1,180 50 490 Isle of Capri Casino Kansas City (d) Kansas City, MO 39,800 890 10 — Isle of Capri Casino Lula Lula, MS 57,000 860 20 490 Isle Casino Hotel - Black Hawk Black Hawk, CO 28,900 850 20 400 26 Property Location Casino Space– Sq. Ft. Slot Machines Table Games Hotel Rooms and Suites Isle Casino Racing Pompano Park Pompano Beach, FL 45,000 800 20 — Lady Luck Casino - Black Hawk Black Hawk, CO 14,900 380 10 — Lady Luck Casino Vicksburg (d) Vicksburg, MS 25,000 580 — 90 Silver Legacy Resort Casino Reno, NV 90,100 800 30 1,680 Tropicana Evansville (e) Evansville, IN 46,300 720 20 — Leased Bally’s Atlantic City (a)(f) Atlantic City, NJ 127,200 1,760 120 1,210 Belle of Baton Rouge Casino & Hotel (g) Baton Rouge, LA 28,500 350 10 290 Caesars Atlantic City (a) Atlantic City, NJ 113,400 2,130 150 1,140 Caesars Southern Indiana (a)(e)(h) Elizabeth, IN 74,400 660 80 500 Harrah’s Atlantic City (a) Atlantic City, NJ 156,300 2,040 160 2,590 Harrah’s Council Bluffs (a) Council Bluffs, IA 21,400 480 20 250 Harrah’s Gulf Coast (a) Biloxi, MS 31,900 630 30 500 Harrah’s Joliet (a) Joliet, IL 39,000 1,090 30 200 Harrah’s Lake Tahoe (a) Lake Tahoe, NV 53,600 770 60 510 Harrah’s Laughlin (a) Laughlin, NV 56,400 600 40 1,510 Harrah’s Louisiana Downs (a)(h)(i) Bossier City, LA 12,000 820 — — Harrah’s Metropolis (a) Metropolis, IL 24,300 450 20 260 Harrah’s New Orleans (a) New Orleans, LA 101,100 1,380 100 450 Harrah’s North Kansas City (a) N. Kansas City, MO 60,100 770 60 390 Harrah’s Philadelphia (a) Chester, PA 110,500 2,270 70 — Harrah’s Reno (a)(j) Reno, NV 42,800 590 20 930 Harveys Lake Tahoe (a) Lake Tahoe, NV 46,700 310 50 740 Horseshoe Bossier City (a) Bossier City, LA 28,300 1,140 70 600 Horseshoe Council Bluffs (a) Council Bluffs, IA 59,900 1,370 60 150 Horseshoe Hammond (a)(e)(h) Hammond, IN 116,500 1,260 110 — Horseshoe Tunica (a) Tunica, MS 63,000 980 100 510 Isle Casino Bettendorf (k) Bettendorf, IA 35,500 640 20 510 Isle Casino Waterloo (k) Waterloo, IA 37,400 600 20 190 Lumière Place Casino St. Louis, MO 75,000 1,330 20 490 MontBleu Casino Resort & Spa (b) Stateline, NV 40,500 210 10 440 Trop Casino Greenville Greenville, MS 22,800 340 10 — Tropicana Casino and Resort, Atlantic City Atlantic City, NJ 121,900 2,360 120 2,360 Tropicana Laughlin Hotel & Casino Laughlin, NV 43,700 560 10 1,490 Managed, International, CIE Segment Owned-International Caesars Cairo (a)(h) Egypt 6,500 30 20 — Ramses Casino (a)(h) Egypt 2,700 40 20 — Emerald Casino Resort (a)(h) South Africa 37,400 410 20 190 Alea Glasgow (a)(h) United Kingdom 22,000 50 20 — Alea Nottingham (a)(h) United Kingdom 15,200 50 10 — The Empire Casino (a)(h) United Kingdom 20,400 150 40 — Manchester235 (a)(h) United Kingdom — 40 30 — Playboy Club London (a)(h) United Kingdom 10,000 20 20 — Rendezvous Brighton (a)(h) United Kingdom 15,000 60 20 — The Sportsman (a)(h) United Kingdom 5,800 40 10 — Managed Harrah’s Ak-Chin (a) Phoenix, AZ 65,200 830 20 530 Harrah’s Cherokee (a) Cherokee, NC 191,800 2,100 160 1,110 Harrah’s Cherokee Valley River (a) Murphy, NC 65,000 700 180 180 Harrah’s Resort Southern California (a) Funner, CA 72,900 1,110 50 1,090 27 Property Location Casino Space– Sq. Ft. Slot Machines Table Games Hotel Rooms and Suites Horseshoe Baltimore (a)(l) Baltimore, MD 133,300 1,900 210 — Caesars Windsor (a) Canada 100,000 470 — — Kings & Queens Casino (a) Egypt 2,100 30 10 — Caesars Dubai (a) United Arab Emirates — — — 580 ____________________ (a) These properties were acquired from the Merger with Former Caesars on July 20, 2020. (b) In April 2020, the Company entered into an agreement to sell Eldorado Shreveport and MontBleu. The sale of Eldorado Shreveport closed on December 23, 2020, and the sale of MontBleu is expected to close in the first half of 2021. As of December 31, 2020, MontBleu's assets and liabilities were classified as held for sale. (c) Hurricane Laura caused severe damage to Isle of Capri Casino Hotel Lake Charles (“Lake Charles”). Lake Charles has been temporarily closed since the end of August 2020 due to damages. The property remains closed until construction of a new land-based casino is complete. (d) Kansas City and Vicksburg were sold on July 1, 2020. (e) On October 27, 2020, the Company entered into an agreement to sell Tropicana Evansville, which is expected to close mid-2021 and on December 24, 2020, the Company entered into an agreement to sell Caesars Southern Indiana, which is expected to close in the third quarter of 2021. In addition, the Company plans to enter into an agreement to divest of Horseshoe Hammond prior to December 31, 2021, as the deadline was extended by the Indiana Gaming Commission. As of December 31, 2020, Evansville’s assets and liabilities were classified as held for sale. (f) Bally's Atlantic City was sold on November 18, 2020. (g) On December 1, 2020, the Company entered into an agreement to sell Belle of Baton Rouge to Casino Queen Holdings, which is expected to close in mid-2021. As of December 31, 2020, Belle of Baton Rouge's assets and liabilities were classified as held for sale. (h) As a result of the Merger, these properties met the requirements for presentation as discontinued operations and held for sale as of December 31, 2020. (i) On September 3, 2020, the Company entered into an agreement to sell Harrah’s Louisiana Downs, which is expected to close in the first half of 2021. (j) Harrah’s Reno was sold on September 30, 2020. (k) On October 27, 2020, the Company entered into agreement with GLPI to exchange real estate relating to Isle Casino Bettendorf and Isle Casino Hotel Waterloo for the real estate relating to Evansville. The exchange closed on December 18, 2020. (l) As of December 31, 2020, Horseshoe Baltimore was 44.3 % owned and held as an equity-method investment. In addition to our properties listed above, other domestic and international properties, including Harrah’s Northern California, are authorized to use the brands and marks of Caesars Entertainment, Inc. Other properties of ours include The LINQ Promenade, next to The LINQ Hotel & Casino (the “LINQ”) and the CAESARS FORUM conference center in our Las Vegas segment. The LINQ Promenade is an open-air dining, entertainment, and retail promenade located on the east side of the Las Vegas Strip that features the High Roller, a 550-foot observation wheel, and the Fly LINQ Zipline attraction. The CAESARS FORUM is a 550,000 square feet conference center with 300,000 square feet of flexible meeting space, two of the largest pillarless ballrooms in the world and direct access to the LINQ. Item 3. Legal Proceedings. For a discussion of our “Legal Proceedings,” refer to Note 11 to our consolidated financial statements located elsewhere in this Annual Report on Form 10-K. Item 4. Mine Safety Disclosures. Not applicable. 28 PART II Item 5. Market for Registrants’ Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Our Common Stock is quoted on the NASDAQ Stock Market under the symbol “CZR”. As of February 22, 2021, there were approximately 341 holders of record of our common stock. We have not paid any cash dividends on our common stock. We intend to retain all of our earnings to finance the development of our business, and thus, do not anticipate paying cash dividends on our common stock for the foreseeable future. Payment of any cash dividends in the future will be at the discretion of our Board and will depend upon, among other things, our future earnings, operations and capital requirements, our general financial condition, general business conditions and restrictions that may be in place under our borrowing arrangements or existing lease agreements. Equity Compensation Plan Information We maintain 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 or restricted stock units (“RSUs”), performance stock units, market-based stock units (“MSUs”), stock appreciation rights, and other stock-based awards or dividend equivalents. See Note 15 for a description of our stock-based compensation plans. The following table sets forth information as of December 31, 2020, with respect to compensation plans under which equity securities that we have authorized for issuance. Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights (1) Weighted average exercise price of outstanding options, warrants and rights (2) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (a) (b) (c) Equity compensation plans approved by security holders 3,537,404 $ 22.57 5,614,787 ___________________ (1) Includes (a) 176,724 shares of common stock issuable upon exercise of outstanding options with a weighted-average exercise price of $22.57 (of which, 111,478 shares were assumed through the Merger with a weighted-average exercise price of $28.91), and (b) 3,360,680 unvested restricted stock units (“RSUs”), performance stock units (“PSUs”), and market-based units (“MSUs”), (of which 2,001,953 RSUs and MSUs were assumed through the Merger). (2) RSUs, PSUs, and MSUs do not have an exercise price and therefore are not included in the calculation of the weighted-average exercise price. Common Stock Offerings On June 19, 2020, we completed the public offering of 20,700,000 shares (including the shares sold pursuant to the underwriters’ overallotment option) of Company Common Stock, at an offering price of $39.00 per share, which provided $772 million of proceeds, net of fees and estimated expenses of $35 million. On October 1, 2020, we completed the public offering of 35,650,000 shares (including the shares sold pursuant to the underwriters’ overallotment option) of Company Common Stock, at an offering price of $56.00 per share, which provided $1.9 billion of proceeds, net of fees and estimated expenses of $50 million. Share Repurchase Program In November 2018, our Board authorized a common stock repurchase program of up to $150 million of stock (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 December 31, 2020, we have acquired 223,823 shares of common stock under this program since 2018 at an aggregate value of $9 million and an average of $40.80 per share. No shares were repurchased during the years ended December 31, 2020 or 2019. 29 Transactions Related to Convertible Notes issued by Former Caesars Former Caesars issued $1.1 billion aggregate principal amount of 5% convertible senior notes maturing in 2024 (the “5% Convertible Notes”). The 5% Convertible Notes are convertible into the weighted average of the number of shares of Company Common Stock and amount of cash actually received per share by holders of common stock of Former Caesars that made elections for consideration in the Merger. As of December 31, 2020, we have paid approximately $903 million and issued approximately 10.8 million shares related to conversions of the 5% Convertible Notes and the remaining outstanding balance could result in the additional issuance of an aggregate of 4.5 million shares of Company Common Stock. Recent Sales of Unregistered Securities None. Stock Performance Graph The following graph demonstrates a comparison of cumulative total returns of the Company, the Standard & Poor’s 500 Stock Index (“S&P 500”) and the Dow Jones US Gambling Index for the period since our common stock began trading on September 22, 2014. The following graph assumes $100 invested in each of the above groups and the reinvestment of dividends, if applicable. Past stock price performance is not necessarily indicative of future results. The performance graph should not be deemed filed or incorporated by reference into any other of our filings under the Securities Act of 1933 or the Exchange Act of 1934, unless we specifically incorporate the performance graph by reference therein. Item 6. Selected Financial Data. Not used. 30 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion should be read in conjunction with, and is qualified in its entirety by, the audited consolidated financial statements and the notes thereto and other financial information included elsewhere in this Annual Report on Form 10-K. Caesars Entertainment, Inc., a Delaware corporation formerly known as Eldorado Resorts, Inc. (“ERI” or “Eldorado”), is referred to as the “Company,” “CEI,” “Caesars,” or the “Registrant,” and together with its subsidiaries may also be referred to as “we,” “us” or “our.” We also refer to (i) our Consolidated Financial Statements as our “Financial Statements,” (ii) our Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income (Loss) as our “Statements of Operations,” (iii) our Consolidated Balance Sheets as our “Balance Sheets,” and (iv) our Consolidated Statements of Cash Flows as our “Statements of Cash Flows.” References to numbered “Notes” refer to Notes to our Consolidated Financial Statements included in Item 8. 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 that past performance is indicative of future performance. Overview We are a geographically diversified gaming and hospitality company that was founded in 1973 by the Carano family with the opening of the Eldorado Hotel Casino in Reno, Nevada. We partnered with MGM Resorts International to build Silver Legacy Resort Casino in Reno, Nevada in 1993 and, beginning in 2005, we grew through a series of acquisitions, including the acquisition of Eldorado Shreveport in 2005, MTR Gaming Group, Inc. in 2014, Circus Circus Reno (“Circus Reno”) and the 50% membership interest in the Silver Legacy that was owned by MGM Resorts International in 2015, Isle of Capri Casinos, Inc. (“Isle” or “Isle of Capri”) in 2017 and Grand Victoria Casino (“Elgin”) and Tropicana Entertainment, Inc. (“Tropicana”) in 2018. Prior to the Merger (as defined below), we operated 23 gaming facilities in 11 states, with no international operations, featuring approximately 23,900 slot machines, video lottery terminals (“VLTs”) and e-tables, approximately 660 table games and approximately 11,300 hotel rooms. On July 20, 2020, we completed the merger with Caesars Entertainment Corporation (“Former Caesars”) pursuant to which Former Caesars became our wholly-owned subsidiary (the “Merger”). As a result of the Merger, we currently own, lease or manage an aggregate of 54 domestic properties in 16 states with approximately 54,600 slot machines, VLTs and e-tables, approximately 3,200 table games and approximately 47,700 hotel rooms as of December 31, 2020. We also have international operations in five countries outside of the U.S. In addition, we have other domestic and international properties that are authorized to use the brands and marks of Caesars Entertainment, Inc., as well as other non-gaming properties. Upon completion of our previously announced sales, or expected sales, of certain gaming properties, we expect that we will continue to own, lease or manage 48 properties. Our primary source of revenue is generated by gaming operations, and we utilize hotels, restaurants, bars, entertainment, racing, sportsbook offerings, retail shops and other services to attract customers to our properties. In connection with the Merger, Caesars Entertainment Corporation changed its name to “Caesars Holdings, Inc.” and Eldorado Resorts, Inc. converted into a Delaware corporation and changed its name to “Caesars Entertainment, Inc.” In addition, effective as of July 21, 2020 our ticker symbol on the NASDAQ Stock Market changed from “ERI” to “CZR”. In connection with the Merger, we also entered into a Master Transaction Agreement (the “MTA”) with VICI Properties L.P., a Delaware limited partnership (“VICI”), pursuant to which, among other things, we agreed to consummate certain sale and leaseback transactions and amend certain lease agreements with VICI and/or its affiliates, with respect to certain property described in the MTA. See Note 3 for further discussion of the Merger and related transactions. As of December 31, 2020, we owned 20 of our casinos and leased 29 casinos in the U.S. We have leases with GLP Capital, L.P., the operating partnership of Gaming and Leisure Properties, Inc. (“GLPI”), including our Master Lease that we entered into in connection with the acquisition of Tropicana on October 1, 2018 (as amended, the “GLPI Master Lease”) and our Lumière lease. Eight of the leased casinos are subject to leases with GLPI, and we lease an additional 21 casinos from other third parties, including VICI. See descriptions under the “GLPI Master Lease” and “VICI Leases.” 31 We periodically divest assets that we do not consider core to our business to raise capital or, in some cases, to comply with conditions, terms, obligations or restrictions imposed by antitrust, gaming and other regulatory entities. A summary of recently completed and planned divestitures of our properties as of December 31, 2020 is as follows: Segment Property Date Sold Location Regional Presque Isle Downs & Casino (“Presque”) January 11, 2019 Pennsylvania Regional Lady Luck Casino Nemacolin (“Nemacolin”) March 8, 2019 Pennsylvania Regional Mountaineer Casino, Racetrack and Resort (“Mountaineer”) December 6, 2019 West Virginia Regional Isle Casino Cape Girardeau (“Cape Girardeau”) December 6, 2019 Missouri Regional Lady Luck Casino Caruthersville (“Caruthersville”) December 6, 2019 Missouri Regional Isle of Capri Casino Kansas City (“Kansas City”) July 1, 2020 (a) Missouri Regional Lady Luck Casino Vicksburg (“Vicksburg”) July 1, 2020 (a) Mississippi Regional Eldorado Resort Casino Shreveport (“Eldorado Shreveport”) December 23, 2020 (b) Louisiana Regional MontBleu Casino Resort & Spa (“MontBleu”) N/A (b) Nevada Regional Tropicana Evansville (“Evansville”) N/A (c) Indiana Regional Belle of Baton Rouge Casino & Hotel (“Baton Rouge”) N/A (d) Louisiana Discontinued operations (e): Regional Harrah’s Reno September 30, 2020 (f) Nevada Regional Bally’s Atlantic City November 18, 2020 (g) New Jersey Regional Harrah’s Louisiana Downs N/A (h) Louisiana Regional Caesars Southern Indiana N/A (c)(i) Indiana Regional Horseshoe Hammond N/A (c) Indiana Managed, International, CIE Emerald Resort & Casino N/A South Africa Managed, International, CIE Caesars Entertainment UK N/A United Kingdom (a) We closed the sales of Kansas City and Vicksburg on July 1, 2020 and recorded a gain of approximately $8 million during the year ended December 31, 2020. (b) On April 24, 2020, we entered into a definitive purchase agreement with Twin River Worldwide Holdings, Inc. (“Twin River” or “Bally’s Corporation”) and certain of its affiliates for the sale of the equity interests of Eldorado Resort Casino Shreveport Joint Venture and Columbia Properties Tahoe, LLC, the entities that hold Eldorado Shreveport and MontBleu, respectively, for aggregate consideration of $155 million, subject to a customary working capital adjustment. The definitive agreement provides that the consummation of the sale is subject to satisfaction of customary conditions, including receipt of required regulatory approvals. The sale of Eldorado Shreveport closed on December 23, 2020 for $140 million, subject to a customary working capital adjustment and we recognized a gain of approximately $29 million during the year ended December 31, 2020. The sale of MontBleu is expected to close in the first half of 2021. MontBleu met the requirements for presentation as assets held for sale as of December 31, 2020. However, the pending divestitures of MontBleu did not meet the requirements for presentation as discontinued operations and MontBleu’s results of operations are included in income from continuing operations in the periods presented. As a result of the agreement to sell MontBleu, an impairment charge totaling $45 million was recorded during the year ended December 31, 2020 due to the carrying value exceeding the estimated net sales proceeds from the sale. (c) In connection with its review of the Merger, the Indiana Gaming Commission determined on July 16, 2020 that, as a condition to their approval of the Merger, we are required to enter into agreements to divest of three properties within the state of Indiana in order to avoid undue economic concentration. On October 27, 2020, the Company entered into an agreement to sell Evansville to GLPI and Twin River for $480 million in cash, subject to a customary working capital adjustment. The sale is subject to satisfaction of customary conditions, including receipt of required regulatory approvals and is expected to close in mid-2021. In addition, on December 24, 2020, the Company entered into an agreement to divest of Caesars Southern Indiana (See (i) below). We expect to enter into an agreement to sell Horseshoe Hammond prior to December 31, 2021, as the deadline was extended by the Indiana Gaming Commission. Evansville met the requirements for presentation as assets held for sale as of December 31, 2020, while Caesars Southern Indiana and Horseshoe Hammond met the requirements for presentation as held for sale and discontinued operations. 32 (d) On December 1, 2020, the Company entered into an agreement to sell the Baton Rouge to CQ Holding Company, Inc. Pursuant to the terms of the GLPI Master Lease, Baton Rouge will be removed from the GLPI Master Lease, and the rent payments to GLPI will remain unchanged. GLPI will retain ownership of the real estate of Baton Rouge. As a result of the agreement to sell Baton Rouge, an impairment charge totaling $50 million was recorded during the year ended December 31, 2020 due to the carrying value exceeding the estimated net sales proceeds. The transaction is expected to close in mid-2021 and is subject to regulatory approvals and other customary closing conditions. (e) These Former Caesars properties met held for sale criteria as of the acquisition date. The sales of these properties have or are expected to close within one year from the date of the closing of the Merger and the properties are classified as discontinued operations. (f) On September 30, 2020, the Company and VICI completed the sale of Harrah’s Reno to and affiliate of CAI Investments for $42 million. The proceeds from the sale were split between the Company and VICI, and the Company received $8 million of net proceeds. (g) On November 18, 2020, the Company and VICI completed the sale of Bally's Atlantic City to Bally’s Corporation for $25 million. The proceeds from the sale were split between the Company and VICI, and the Company received $5 million of net proceeds. As a result of the sale, the Company agreed to reimburse Bally’s Corporation $30 million for capital expenditures required at Bally’s Atlantic City and recorded a liability within Accrued other liabilities and recorded a charge to Discontinued operations, net of income taxes. Our commitment will be satisfied by adjusting obligations under certain sportsbook operating agreements between Bally’s Corporation and the Company following our expected acquisition of William Hill. In addition, on October 9, 2020, we reached an agreement to sell the Bally’s brand to Bally’s Corporation for $20 million, while retaining the right to use the brand within Bally’s Las Vegas into perpetuity. (h) On September 3, 2020, the Company and VICI entered into an agreement with Rubico Acquisition Corp. to sell Harrah’s Louisiana Downs for $22 million, subject to a customary working capital adjustment, where the proceeds will be split between the Company and VICI. The sale is subject to satisfaction of customary conditions, including receipt of required regulatory approvals and is expected to close in the first half of 2021. (i) On December 24, 2020, the Company entered into agreement to sell Caesars Southern Indiana to the Eastern Band of Cherokee Indians (“EBCI”) for $250 million, subject to a customary working capital adjustment. Caesar’s annual payments to VICI under the Regional Lease will decline by $33 million upon closing of the transaction. Additionally, effective as of the closing of the transaction, Caesars and EBCI will enter into a long-term agreement for the continued use of the Caesars brand and Caesars Rewards loyalty program at Caesars Southern Indiana. The sale is subject to satisfaction of customary conditions, including receipt of required regulatory approvals and is expected to close in the third quarter of 2021. Merger and Acquisitions Related Activities Merger with Caesars Entertainment Corporation On July 20, 2020, the Merger was consummated and Former Caesars became a wholly-owned subsidiary of ours. The strategic rationale for the Merger includes, but is not limited to, the following: • Creation of the largest owner, operator and manager of domestic gaming assets; • Diversification of the Company’s domestic footprint; • Access to iconic brands, rewards programs and new gaming opportunities expected to enhance customer experience; and • Realization of significant identified synergies. Based on the closing price of $38.24 per share of the Company’s common stock, par value $0.00001 per share (“Company Common Stock”), reported on the NASDAQ Stock Market on July 20, 2020, the aggregate implied value of the aggregate merger consideration paid to former holders of Former Caesars common stock in connection with the Merger was approximately $8.5 billion, including approximately $2.4 billion in the Company Common Stock and approximately $6.1 billion in cash. The aggregate merger consideration transferred also included approximately $2.4 billion related to the repayment of certain outstanding debt balances of Former Caesars and approximately $48 million of other consideration paid, which includes $19 million related to a transaction success fee, for the benefit of Former Caesars, and $29 million for the replacement of equity awards of certain employees attributable to services provided prior to the Merger. 33 Pursuant to the Merger, each share of Former Caesars common stock was converted into the right to receive, at the election of the holder thereof and subject to proration, approximately $12.41 of cash consideration or approximately 0.3085 shares of Company Common Stock, with a value equal to approximately $12.41 in cash (based on the volume weighted average price per share of Company Common Stock for the 10 trading days ending on July 16, 2020). Following the consummation of the Merger, stockholders of the Company and stockholders of Former Caesars held approximately 61% and 39%, respectively, of the outstanding shares of Company Common Stock. We recognized acquisition-related transaction costs in connection with the Merger of $160 million for the year ended December 31, 2020, and $80 million for the year ended December 31, 2019. Tropicana Entertainment Inc. On October 1, 2018, we acquired Tropicana in a cash transaction valued at $1.9 billion (the “Tropicana Acquisition”). At the closing of the transaction Tropicana became a wholly-owned subsidiary of ours. Immediately prior to our acquisition, Tropicana sold Tropicana Aruba Resort and GLP Capital, L.P., a wholly-owned subsidiary of GLPI, acquired substantially all of Tropicana’s real estate, other than the real estate underlying MontBleu and Lumière, for approximately $964 million. We acquired the real estate underlying Lumière for $246 million with the proceeds of a $246 million loan from GLPI. We funded the remaining consideration payable with our cash on hand and cash on hand at Tropicana, borrowings under our revolving credit facility and proceeds from our offering of $600 million of 6% senior notes due 2026. Substantially concurrently with the acquisition of the real estate portfolio by GLPI, we entered into a triple net master lease for the Tropicana properties acquired by GLPI (“GLPI Master Lease”). The initial annual rent under the terms of the lease was approximately $88 million and is subject to annual escalation. We do not have the ability to terminate the obligations under the Master Lease prior to its expiration without GLPI’s consent. In connection with the purchase of the real estate related to Lumière, Tropicana St. Louis RE LLC, a wholly-owned subsidiary of ours, and GLPI entered into a loan agreement, dated as of October 1, 2018 (the “Lumière Loan”), relating to a loan of $246 million by GLPI to Tropicana St. Louis RE to fund the purchase price of the real estate underlying Lumière. The Lumière Loan was guaranteed by us, bore interest at a rate equal to 9.27% and had a maturity date of October 1, 2020. On June 24, 2020, the Company received approval from Missouri Gaming Commission to sell the real estate underlying Lumière to GLPI and leaseback the property under a long-term financing obligation. As of December 31, 2020, the Lumière loan has been satisfied in full and the real estate has been refinanced under a financing obligation. Grand Victoria Casino On August 7, 2018, we completed the acquisition (the “Elgin Acquisition”) of the Grand Victoria Casino (“Elgin”) in Elgin, Illinois. We purchased Elgin for $329 million, including a working capital adjustment totaling $1 million. The Elgin Acquisition was financed using cash on hand and borrowings under the Company’s revolving credit facility. Partnerships and Acquisition Opportunities William Hill In September 2018, we entered into a 25-year agreement, which became effective January 29, 2019, with William Hill plc and William Hill U.S. Holdco. Inc. (“William Hill US”), its U.S. subsidiary (together, “William Hill”) pursuant to which we (i) granted to William Hill the right to conduct betting activities, including operating sportsbooks, in retail channels and under our first skin and third skin for online channels with respect to our current and future properties located in the United States and the territories and possessions of the United States, including Puerto Rico and the U.S. Virgin Islands and (ii) agreed that William Hill will have the right to conduct real money online gaming activities utilizing our second skin available with respect to properties in such territories . Pursuant to the terms of the agreement, we received a 20% ownership interest in William Hill US with an initial value of approximately $129 million as well as 13 million ordinary shares of William Hill plc with an initial value of approximately $27 million upon closing of the transaction in January 2019. We granted William Hill the right to the use of certain skins in exchange for an equity method investment. The fair value of the William Hill US and William Hill plc shares received has been deferred and is recognized as revenue on a straight-line basis over the 25-year agreement term. The amortization of deferred revenues associated with our equity interests is included in other revenue within our Corporate and Other segment. Additionally, we receive a profit share from the operations of betting and other gaming activities associated with our properties. 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 of approximately £2.9 billion, or $3.7 billion . To 34 provide liquidity to fund the cash purchase price for the proposed acquisition, we entered into various financing transactions. On September 25, 2020, we borrowed $900 million under the CEI Revolving Credit Facility (defined below), which was fully repaid in October 2020. O n October 1, 2020, we raised an additional $1.9 billion through a public offering of Company Common Stock which was deposited into an escrow account. As of December 31, 2020, these funds in escrow were classified as restricted cash and will remain restricted until the proposed acquisition of William Hill plc closes. In order to manage the risk of appreciation of the GBP denominated purchase price the Company has entered into foreign exchange forward contracts. In connection with the proposed acquisition of William Hill plc, on September 29, 2020, the Company entered into a debt financing commitment letter pursuant to which the lenders party thereto have committed to arrange and provide a newly formed subsidiary of the Company with (a) a £1.0 billion senior secured 540-day bridge loan facility, (b) a £116 million senior secured 540-day revolving credit facility and (c) a £503 million senior secured 60-day bridge loan facility (collectively, the “Debt Financing”). The proceeds of the Debt Financing will be used (i) to pay a portion of the cash consideration for the proposed acquisition, (ii) to refinance certain of William Hill plc's and its subsidiaries' existing debt, (iii) to pay fees and expenses related to the acquisition and related transactions and (iv) for working capital and general corporate purposes. Pending negotiation of the loan agreement for the Debt Financing, on October 6, 2020, our newly formed subsidiary entered into a £1.5 billion Interim Facilities Agreement (the “Interim Facilities Agreement”) with Deutsche Bank AG, London Branch and JPMorgan Chase Bank, N.A. to provide: (a) a 90-day £1.0 billion interim asset sale bridge facility and (b) a 90-day £503 million interim cash confirmation bridge facility. The transaction is conditioned on, among other things, the approval of William Hill plc shareholders, which was received on November 19, 2020, and receipt of required regulatory approvals. On December 28, 2020, we obtained the early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”) relating to the proposed combination with William Hill plc. A final UK court hearing is scheduled for the last week of March 2021 and we expect to close the acquisition shortly thereafter. The Stars Group/Flutter Entertainment In November 2018, the Company entered into a 20-year agreement with The Stars Group Inc. (“TSG”) pursuant to which we agreed to provide TSG with options to obtain access to our second skin for online sports wagering and third skin for real money online gaming and poker, in each case with respect to states in which our properties are located. Under the terms of the agreement, we received 1 million TSG common shares. The fair value of the shares received has been deferred and is recognized as revenue on a straight-line basis over the 20-year agreement term. All shares are subject to a 1 year restriction on transfer from the date they are received. On May 5, 2020, Flutter Entertainment plc (“Flutter”) completed the acquisition of all of the issued and outstanding common shares of TSG in exchange for 0.2253 Flutter shares per common share of TSG. In addition, we receive a revenue share from the operation of the applicable verticals by TSG under our licenses. In December 2020, the Company sold 121,285 of these Flutter shares for net proceeds of approximately $24 million. Reportable Segments Segment results in this MD&A are presented consistent with the way our management assesses the operating results, assesses performance and allocates resources of the Company, which is a consolidated view that adjusts for the effect of certain transactions related to reportable segments within the Company. We view each property as an operating segment. Prior to the Merger, our principal operating activities occurred in five geographic regions and reportable segments: West, Midwest, South, East and Central, in addition to Corporate and Other. Following the Merger, our principal operating activities occur in three regionally-focused reportable segments. The Company’s reportable segments are: (1) Las Vegas, (2) Regional, and (3) Managed, International, CIE, in addition to Corporate and Other. See Item 2. Properties for listing of properties by segment. Presentation of Financial Information The financial information included in this Item 7 for the period after our acquisition of Former Caesars on July 20, 2020 is not fully comparable to the periods prior to the acquisition. In addition, the presentation of financial information included in this Item 7 for the periods after our sales and acquisitions of various properties are not fully comparable to the periods prior to their respective sale dates. 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 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 audited consolidated financial statements and the notes to those statements included in this Annual Report on Form 10-K. 35 Reclassifications Certain reclassifications of prior year presentations have been made to conform to the current period presentation. Marketing and promotions expense previously disclosed for the years ended December 31, 2019 and 2018 has been reclassified to Casino and pari-mutuel commissions expense and General and administrative expense based on the nature of the expense. Key Performance Metrics Our primary source of revenue is generated by our gaming operations, but we use our hotels, restaurants, bars, entertainment, retail shops, racing, sportsbook offerings and other services to attract customers to our properties. Our operating results are highly dependent on the volume and quality of customers visiting and staying at our properties. Key performance metrics include volume indicators such as table games drop and slot 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. In addition, hotel occupancy and price per room designated by average daily rate (“ADR”) are key indicators for our hotel business. Our calculation of ADR consists of the average price of occupied rooms per day including the impact of resort fees and complimentary rooms. Complimentary room rates are determined based on an analysis of retail or cash rates for each customer segment and each type of room product to estimate complimentary rates which are consistent with retail rates. Complimentary rates are reviewed at least annually and on an interim basis if there are significant changes in market conditions. Complimentary rooms are treated as occupied rooms in our calculation of hotel occupancy. Significant Factors Impacting Financial Results The following summary highlights the significant factors impacting our financial results during the years ended December 31, 2020, 2019 and 2018. Acquisitions and Transaction Costs • Caesars – The Merger closed on July 20, 2020. Transaction costs related to our acquisition of Former Caesars totaled $160 million and $80 million for the years ended December 31, 2020 and 2019, respectively. • Tropicana – Our results of operations for the year ended December 31, 2018 include incremental revenues and expenses attributable to the seven properties we acquired in our acquisition of Tropicana on October 1, 2018. Transaction expenses related to our acquisition of Tropicana totaled $4 million and $18 million for the years ended December 31, 2019 and 2018, respectively. • Elgin – Our results of operations for the year ended December 31, 2018 include incremental revenues and expenses for the period of August 7, 2018 through December 31, 2018 attributable to Elgin. Transaction expenses related to our acquisition of Elgin totaled $0.2 million and $4 million for the years ended December 31, 2019 and 2018, respectively. Divestitures and Discontinued Operations • Divestitures – We closed the sale of Eldorado Shreveport on December 23, 2020 and recorded a gain of approximately $29 million during the year ended December 31, 2020. We closed the sales of Kansas City and Vicksburg on July 1, 2020 and recorded a gain of approximately $8 million during the year ended December 31, 2020. We closed the sales of Presque and Nemacolin on January 11, 2019 and March 8, 2019, respectively, and recorded a total net gain of $22 million, substantially related to the sale of Presque. We closed the sales of Mountaineer, Cape Girardeau and Caruthersville on December 6, 2019 and recorded a net gain of $29 million during the fourth quarter of 2019. The properties that have been sold are collectively referred to as “Divestitures.” In conjunction with the classification of MontBleu and Baton Rouge’s operations as assets held for sale as a result of the announced sale, impairment charges totaling $45 million and $50 million, respectively, were recorded during the year ended December 31, 2020 due to the carrying value exceeding the estimated net sales proceeds. None of the sales listed met requirements for presentation as discontinued operations and the results of operations of the relevant entities are included in income from continuing operations for the periods prior to their respective closing dates. • Discontinued Operations – As result of the Merger, Former Caesars properties, including Harrah’s Louisiana Downs, Caesars Southern Indiana, Horseshoe Hammond, Harrah’s Reno, Caesars UK group, including Emerald Resort & Casino, and Bally’s Atlantic City, have met held for sale criteria as of the date of the closing of the Merger. The sales of these properties have or are expected to close within one year from the date of the closing of the Merger and the properties are classified as discontinued operations. Additionally, we closed the sale of Harrah’s Reno on September 30, 2020 and Bally’s Atlantic City on November 18, 2020. As a result of the sale of Bally’s Atlantic City, Caesars agreed to reimburse Bally’s Corporation $30 million for capital expenditures required at Bally’s Atlantic City and recorded a liability within Accrued other liabilities and a charge to Discontinued operations, net of income taxes. Our 36 commitment will be satisfied by adjusting obligations under certain sportsbook operating agreements between Bally’s Corporation and the Company following our expected acquisition of William Hill. Financing and Lease Transactions • New Debt Transactions related to the Merger – In connection with the Merger, we issued new notes, entered into a new credit agreement and assumed certain of Former Caesars indebtedness. In addition, we terminated previously outstanding credit agreements and discharged outstanding notes. As a result of these transactions, described more fully in the Liquidity and Capital Resources section below, we recorded a loss on extinguishment of debt of $132 million during the year ended December 31, 2020, which is recorded within Loss on extinguishment of debt on the Statement of Operations, as well as an additional $388 million of interest expense for the year ended December 31, 2020 compared to 2019. We also recorded a net gain of $16 million on conversions related to the 5% Convertible Notes during the year ended December 31, 2020. • VICI Leases – Upon consummation of the Merger, CEI assumed obligations of certain real property assets leased from VICI by Former Caesars under various lease agreements. We recorded interest expense of $491 million during the year ended December 31, 2020. • GLPI Master Lease – We accounted for the GLPI Master Lease as a deferred financing obligation effective October 1, 2018. We recorded interest expense in the amount of $104 million, $99 million and $24 million during the years ended December 31, 2020, 2019 and 2018, respectively, which was in excess of the cash lease payments as we continue to accrete up the liability during the earlier periods of the GLPI Master Lease. • Tropicana Financing – On September 20, 2018, we issued $600 million in aggregate principal amount of 6.0% senior notes due 2026. The proceeds from the notes were used to fund the Tropicana Acquisition which closed on October 1, 2018. We incurred $10 million of incremental interest expense on these notes for the year ended December 31, 2018. Other Significant Factors • COVID-19 Public Health Emergency – In January 2020, an outbreak of a new strain of coronavirus (“COVID-19”) was identified and has since spread throughout much of the world, including the United States. All of our casino properties were temporarily closed for the period from mid-March 2020 through mid-May 2020 due to orders issued by various government agencies and tribal bodies as part of certain precautionary measures intended to help slow the spread of the COVID-19 public health emergency. On May 15, 2020, we began reopening our properties and have resumed certain operations at all of our properties as of December 31, 2020, with the exception of additional temporary closures of Caesars Windsor, Harrah’s Philadelphia, and our properties in Illinois. Subsequently, Harrah’s Philadelphia and our properties in Illinois have reopened. The COVID-19 public health emergency has had a material adverse effect on our business, financial condition and results of operations for the year ended December 31, 2020. We continued to pay our full-time employees through April 10, 2020, including tips and tokens. Effective April 11, 2020, we furloughed approximately 90% of our employees, implemented salary reductions and committed to continue to provide benefits to our employees during the duration of their respective furlough period. A portion of our workforce has returned to service as the properties have resumed with limited capacities and in compliance with operating restrictions imposed by governmental or tribal orders, directives, and guidelines. Due to the impact of the ongoing COVID-19 public health emergency on our results of operations, we obtained waivers on the financial covenants in our Former Caesars credit facility agreement and the GLPI Master Lease. The extent of the ongoing and future effects of the COVID-19 public health emergency on our business and the casino resort industry generally is uncertain, but we expect that it will continue to have a significant impact on our business, results of operations and financial condition. The extent and duration of the impact of COVID-19 on our business, results of operations and financial condition will ultimately depend on future developments, including but not limited to, the duration and severity of the outbreak, the efficacy and availability of vaccines, restrictions on operations imposed by governmental authorities, the potential for authorities reimposing stay at home orders or additional restrictions in response to continued developments with the COVID-19 public health emergency, our ability to adapt to evolving operating procedures, the impact on consumer demand and discretionary spending, the length of time it takes for demand to return and our ability to adjust our cost structures for the duration of the outbreak’s effect on our operations. • Impairment Charges – As a result of declines in recent performance and the expected impact on future cash flows as a result of COVID-19, we recognized impairment charges in our Regional segment related to goodwill and trade names totaling $100 million and $16 million, respectively, during the year ended December 31, 2020. In addition, as a result of the agreements to sell properties in our Regional segment, as well as certain corporate assets, impairment charges 37 totaling $99 million were recorded during the year ended December 31, 2020 due to the carrying value exceeding the estimated net sales proceeds. • Weather and Construction Disruption – Our Regional segment was negatively impacted by severe weather, including flooding, during the first quarter of 2019 compared to the same current year period. Additionally, our Regional segment was negatively impacted by disruption to our casino floor and hotel availability associated with renovation projects at our Black Hawk properties during the construction period from January to June 2019. In late August 2020, our Regional segment was negatively impacted by Hurricane Laura, causing severe damage to Isle of Capri Casino Hotel Lake Charles (“Lake Charles”), which remains closed as the construction of a new land-based casino is in process. We recorded an insurance receivable of $44 million , of which $15 million related to fixed asset impairments and $29 million related to remediation costs and repairs that have been incurred during year ended December 31, 2020 . Results of Operations The following table highlights the results of our operations: Years Ended December 31, (Dollars in millions) 2020 2019 2018 Net revenues: Las Vegas $ 751 $ — $ — Regional 2,545 2,520 2,055 Managed, International, CIE 163 — — Corporate and Other (a) 15 8 1 Total $ 3,474 $ 2,528 $ 2,056 Net (loss) income $ (1,758) $ 81 $ 95 Adjusted EBITDA (b) : Las Vegas $ 133 $ — $ — Regional 671 732 548 Managed, International, CIE 34 — — Corporate and Other (a) (101) (35) (32) Total Segment Adjusted EBITDA $ 737 $ 697 $ 516 Net (loss) income margin (c) (50.6) % 3.2 % 4.6 % Adjusted EBITDA margin 21.2 % 27.6 % 25.1 % ___________________ (a) Corporate and Other includes revenues related to certain licensing revenue and various revenue sharing agreements. Corporate and Other expenses include corporate overhead costs, which consist of certain expenses, such as: payroll, professional fees, travel expenses and other general and administrative expenses that do not directly relate to or have not otherwise been allocated to a property. Expenses incurred for corporate activities that are directly attributable to a property or are otherwise incurred to support a property are allocated to each property. (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 description of Adjusted EBITDA and a reconciliation of net (loss) income to Adjusted EBITDA related margins. (c) Net (loss) income margin is calculated as net (loss) income divided by net revenues. Consolidated comparison of the years ended December 31, 2020, 2019 and 2018 Comparisons between 2020 and 2019 are described below. A discussion of changes in our results of operations between year ended December 31, 2019 compared to 2018 has been omitted from this Annual Report on Form 10-K and can be found in “ Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations - Year Ended December 31, 2019 Compared to the Year Ended December 31, 2018 ” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019. 38 Net Revenues Net revenues were as follows: Years Ended December 31, Variance Percent Change Variance Percent Change (Dollars in millions) 2020 2019 2018 2020 vs 2019 2019 vs 2018 Net revenues: Casino and pari-mutuel commissions $ 2,337 $ 1,808 $ 1,553 $ 529 29.3 % $ 255 16.4 % Food and beverage 337 301 247 36 12.0 % 54 21.9 % Hotel 450 300 184 150 50.0 % 116 63.0 % Other 350 119 72 231 194.1 % 47 65.3 % Net Revenues $ 3,474 $ 2,528 $ 2,056 $ 946 37.4 % $ 472 23.0 % Consolidated revenues increased for the year ended December 31, 2020 as a result of our acquisition of Former Caesars on July 20, 2020. This was offset by a decline in revenues associated with the impact of COVID-19 public health emergency and, to a lesser extent, divestitures of certain properties discussed earlier. All of our casino properties were temporarily closed for the period from mid-March 2020 through mid-May 2020 due to orders issued by various government agencies and tribal bodies as part of certain precautionary measures intended to help slow the spread of the COVID-19 public health emergency. On May 15, 2020, we began reopening our properties and have resumed certain operations at all of our properties as of December 31, 2020, with the exception of additional temporary closures of Caesars Windsor, Harrah’s Philadelphia, and our properties in Illinois. Subsequently, Harrah’s Philadelphia and our properties in Illinois have reopened. Our property in Lake Charles remains closed as a result of damage suffered in Hurricane Laura and will remain closed until construction of a new land-based casino is complete. Due to the impact of the COVID-19 public health emergency, including local and state regulations and the implementation of social distancing and health and safety protocols, our properties are subject to reduced gaming capacity and hotel occupancy, limited operation of food and beverage outlets, live entertainment events and conventions. As a result, gaming revenue represents a larger portion of our total revenues following the reopening of our properties as compared to earlier periods, which we expect to continue until such time as we are able to fully operate our non-gaming amenities following the reduction or elimination of social distancing and safety and health protocols, and other regulatory restrictions limiting capacity and other aspects of our business. Our diversified portfolio has yielded mixed results as the properties have reopened under the conditions noted above. Net revenues for properties which have historically relied on a local customer base, not dependent on air travel or convention business, showed a smaller decrease as compared to the year ended December 31, 2019 results. These properties’ gaming and hotel revenues have historically been the largest portion of their total revenue. Properties in destination markets such as Las Vegas, Atlantic City, Northern Nevada and New Orleans, which have historically relied on a broader regional and national customer base or convention business have declined significantly as compared to the prior year period. These destination markets were impacted by restrictions on, and an overall decline in, air travel related to COVID-19. These properties have historically relied on a broader mix of revenue sources including convention, entertainment, and food and beverage offerings. As a result of reduced visitation, air travel, state and local restrictions on capacity, and social distancing and safety and health protocols, these sources of revenue have been materially reduced as compared to prior periods. 39 Operating Expenses Operating expenses were as follows: Years Ended December 31, Variance Percent Change Variance Percent Change (Dollars in millions) 2020 2019 2018 2020 vs 2019 2019 vs 2018 Operating Expenses: Casino and pari-mutuel commissions $ 1,197 $ 905 $ 824 $ 292 32.3 % $ 81 9.8 % Food and beverage 261 239 203 22 9.2 % 36 17.7 % Hotel 170 99 65 71 71.7 % 34 52.3 % Other 140 46 39 94 * 7 17.9 % General and administrative 882 503 381 379 75.3 % 122 32.0 % Corporate 195 66 46 129 195.5 % 20 43.5 % Impairment charges 215 1 14 214 * (13) (92.9) % Depreciation and amortization 583 222 157 361 162.6 % 65 41.4 % Transaction costs and other operating costs 268 37 17 231 * 20 117.6 % Total operating expenses $ 3,911 $ 2,118 $ 1,746 $ 1,793 84.7 % $ 372 21.3 % ___________________ * Not meaningful. Casino and pari-mutuel expenses consist primarily of salaries and wages associated with our gaming operations, marketing and promotions and gaming taxes. Hotel expenses consist principally of salaries, wages and supplies associated with our hotel operations. Food and beverage expenses consist principally of salaries and wages and costs of goods sold associated with our food and beverage operations. Other expenses consist principally of salaries and wages and costs of goods sold associated with our retail, entertainment and other operations. Casino and pari-mutuel, hotel, food and beverage, and other expenses for the year ended December 31, 2020 increased year over year as a result of our acquisition of Former Caesars. This was partially offset as a result of the temporary closures of all of our properties due to the COVID-19 public health emergency, which reduced our salaries and wages, gaming taxes, costs of goods sold, and other expenses. As discussed above, our reopened properties are operating with reduced gaming and hotel capacity and limited food and beverage options. In addition, our properties have reduced marketing and promotional spend, resulting in further declines in gaming expenses. 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. Property, general and administrative expenses also include stock-based compensation expense for certain property executives, sports sponsorships and other marketing expenses not directly related to our gaming operations. General and administrative expenses for the year ended December 31, 2020 increased year over year as the result of our acquisition of Former Caesars. This was offset by actions taken to reduce our cost structure while our properties were temporarily closed and during the period of reduced operations due to the impact of the COVID-19 public health emergency, which are discussed above and implemented. For the year ended December 31, 2020 compared to the same prior year period, corporate expenses increased primarily due to the acquisition of Former Caesars offset by reductions in salaries and wages due to reductions in workforce implemented as a result of the impact of the COVID-19 public health emergency. For the year ended December 31, 2020 compared to the same prior year period, depreciation and amortization expense increased mainly due to the acquisition of Former Caesars offset by ceasing depreciation and amortization expense on assets held for sale and the Divestitures. For the year ended December 31, 2020 compared to the same prior year period, transaction costs and other operating costs increased primarily due to costs or fees incurred related to the Merger, various project exit fees and related write offs, and higher severance expense related to synergies associated with the Merger. 40 Impairment charges increased by $214 million in 2020 due to impairment related to goodwill and trade names recognized due to a triggering event resulting from the COVID-19 public health emergency as well as impairments related to our held for sale properties recognized due to the carrying value exceeding the estimated net sales proceeds. Other expense Other expense was as follows: Years Ended December 31, Variance Percent Change Variance Percent Change (Dollars in millions) 2020 2019 2018 2020 vs 2019 2019 vs 2018 Other expense Interest expense, net $ (1,174) $ (286) $ (172) $ (888) * $ (114) (66.3) % Loss on extinguishment of debt (197) (8) — (189) * (8) * Other (loss) income 176 9 (3) 167 * 12 * Provision for income taxes (126) (44) (40) (82) (186.4) % (4) (10.0) % ___________________ * Not meaningful. For the year ended December 31, 2020, interest expense, net increased year over year as a result of our acquisition of Former Caesars. Outstanding debt assumed, additional debt raised, and assumed financing obligations resulted in the increase in interest expense. For the year ended December 31, 2020, the loss on extinguishment of debt increased year over year due to the early repayment of outstanding debt as a result of our acquisition of Former Caesars. For the year ended December 31, 2020, other (loss) income increased year over year mainly due to a gain of $169 million related to the change in the foreign currency exchange rate associated with restricted cash held in GBP for, and a derivative contract related to, our expected acquisition of William Hill. The effective tax rate was (7.7%) for 2020, 35.2% for 2019, and 29.8% for 2018. The effective tax rate in 2020 differed from the statutory rate of 21% primarily due to an increase in the valuation allowance against the deferred tax assets due to the series of transactions with VICI during the year. Segment comparison for the years ended December 31, 2020, 2019 and 2018 Las Vegas Segment Years Ended December 31, Variance Percent Change Variance Percent Change (Dollars in millions) 2020 2019 2018 2020 vs 2019 2019 vs 2018 Revenues: Casino and pari-mutuel commissions $ 319 $ — $ — $ 319 * $ — * Food and beverage 130 — — 130 * — * Hotel 186 — — 186 * — * Other 116 — — 116 * — * Net revenues $ 751 $ — $ — $ 751 * $ — * Adjusted EBITDA $ 133 $ — $ — $ 133 * $ — * Adjusted EBITDA margin 17.7 % — % — % 17.7 pts * Net (loss) income attributable to Caesars $ (287) $ — $ — $ (287) * $ — * ___________________ * Not meaningful. 41 Las Vegas segment’s net revenues and Adjusted EBITDA increased as a result of the acquisition of Former Caesars. As of December 31, 2020, all of our Las Vegas properties were reopened. All of our properties within the Las Vegas segment reopened with reduced gaming and hotel capacity with limited food and beverage offerings as well as limited capacity at a few entertainment shows. As of December 31, 2020, convention venues have not reopened due to capacity limitations. In the period between properties reopening and December 31, 2020, all of our reopened properties in the Las Vegas segment experienced a significant decline in net revenues and Adjusted EBITDA compared to Former Caesars’ prior year results for the same properties due to the general weakness in the economic environment resulting from reduced visitation and travel to Las Vegas resulting from the COVID-19 public health emergency. Compared to our Regional Segment, Adjusted EBITDA margin for our Las Vegas segment experienced a more significant negative impact from declines in revenue, as well as rent expense associated with our Rio lease beginning in December 2019. Regional Segment Years Ended December 31, Variance Percent Change Variance Percent Change (Dollars in millions) 2020 2019 2018 2020 vs 2019 2019 vs 2018 Revenues: Casino and pari-mutuel commissions $ 1,972 $ 1,808 $ 1,553 $ 164 9.1 % $ 255 16.4 % Food and beverage 206 301 247 (95) (31.6) % 54 21.9 % Hotel 264 300 184 (36) (12.0) % 116 63.0 % Other 103 111 71 (8) (7.2) % 40 56.3 % Net revenues $ 2,545 $ 2,520 $ 2,055 $ 25 1.0 % $ 465 22.6 % Adjusted EBITDA $ 671 $ 732 $ 548 $ (61) (8.3) % $ 184 33.6 % Adjusted EBITDA margin 26.4 % 29.0 % 26.7 % (2.6) pts 2.3 pts Net (loss) income attributable to Caesars $ (338) $ 398 $ 320 $ (736) (184.9) % $ 78 24.4 % Regional segment’s net revenues increased as a result of our merger with Former Caesars. Adjusted EBITDA and margin decreased for the year ended December 31, 2020 compared to the same prior year period as a result of property closures due to the COVID-19 public health emergency. All of our properties in our Regional segment, with the exception of Lake Charles, Harrah’s Philadelphia and our properties in Illinois reopened as of December 31, 2020. Subsequently, Harrah’s Philadelphia and our properties in Illinois have reopened. All of our properties within the Regional segment reopened with reduced gaming and hotel capacity and with limited food and beverage offerings. In the period between properties reopening and December 31, 2020, our Regional properties experienced a decline in net revenues as compared to the prior year. The majority of our Regional properties other than Atlantic City, Northern Nevada and New Orleans, Adjusted EBITDA declined slightly as compared to prior year, when including Former Caesars’ prior year, for the same properties. Adjusted EBITDA margin for these properties was higher as compared to prior year due to operating with a reduced workforce, reducing marketing costs, and limiting certain lower margin food and beverage offerings. Properties in Atlantic City, Northern Nevada and New Orleans experienced significant declines in net revenues and Adjusted EBITDA as compared to prior year and Former Caesars’ prior year for the same properties as they were all negatively impacted by reduced visitation and limitations on capacity due to the COVID-19 public health emergency. 42 Managed, International & CIE Segment Years Ended December 31, Variance Percent Change Variance Percent Change (Dollars in millions) 2020 2019 2018 2020 vs 2019 2019 vs 2018 Revenues: Casino and pari-mutuel commissions $ 46 $ — $ — $ 46 * $ — * Food and beverage 1 — — 1 * — * Other 116 — — 116 * — * Net revenues $ 163 $ — $ — $ 163 * $ — * Adjusted EBITDA $ 34 $ — $ — $ 34 * $ — * Adjusted EBITDA margin 20.9 % — % — % 20.9 pts * Net (loss) income attributable to Caesars $ 38 $ — $ — $ 38 * $ — * ___________________ * Not meaningful. Managed, International, CIE segment’s net revenues and Adjusted EBITDA increased as a result of the acquisition of Former Caesars. All of our managed properties have reopened as of December 31, 2020, with the exception of Caesars Windsor. Our CIE business was not closed at any point related to the COVID-19 public health emergency. For the year ended December 31, 2020, net revenues for Managed, International and CIE declined as compared to Former Caesars’ prior period related to reimbursed management costs related to Caesars Windsor remaining closed throughout the current period. Excluding that, net revenues increased primarily related to increased revenue in our CIE business. Adjusted EBITDA for Managed, International and CIE increased as compared to Former Caesars’ prior period. Corporate & Other Years Ended December 31, Variance Percent Change Variance Percent Change (Dollars in millions) 2020 2019 2018 2020 vs 2019 2019 vs 2018 Revenues: Other $ 15 $ 8 $ 1 $ 7 87.5 % $ 7 * Net revenues $ 15 $ 8 $ 1 $ 7 87.5 % $ 7 * Adjusted EBITDA $ (101) $ (35) $ (32) $ (66) (188.6) % $ (3) (9.4) % ___________________ * Not meaningful. Supplemental Unaudited Presentation of Consolidated Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) for the Years Ended December 31, 2020, 2019 and 2018 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 expense, (benefit) provision for income taxes, unrealized (gain) loss on investments and marketable securities, depreciation and amortization, stock-based compensation, impairment charges, transaction expenses, severance expense, selling costs associated with the divestitures of properties, equity in income (loss) of unconsolidated affiliates, (gain) loss on the sale or disposal of property and equipment, (gain) loss related to divestitures, changes in the fair value of certain derivatives and certain non-recurring expenses such as sign-on and retention bonuses, business optimization expenses and transformation expenses, litigation awards and settlements, losses on inventory associated with properties temporarily closed as a result of the COVID-19 public health emergency, contract exit or termination costs, and 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 43 interest expense. Adjusted EBITDA is not a measure of performance or liquidity calculated in accordance with GAAP, is unaudited and should not be considered an alternative to, or more meaningful than, net income (loss) as an indicator of our operating performance. Uses of cash flows that are not reflected in Adjusted EBITDA include capital expenditures, interest payments, income taxes, debt principal repayments, payments under our leases with affiliates of GLPI and VICI Properties Inc. and certain regulatory gaming assessments, which can be significant. As a result, Adjusted EBITDA should not be considered as a measure of our liquidity. Other companies that provide EBITDA information may calculate Adjusted EBITDA differently than we do. The definition of Adjusted EBITDA may not be the same as the definitions used in any of our debt agreements. The following table summarizes our Adjusted EBITDA for our operating segments for the years ended December 31, 2020, 2019 and 2018, respectively, in addition to reconciling net (loss) income to Adjusted EBITDA in accordance with US GAAP (unaudited): Year Ended December 31, 2020 (In millions) CEI Less: Divest. Add: Disc. Ops (e)(h) Pre-Acq. CEC (f) Total (g)(i) Net loss attributable to Caesars $ (1,757) $ 93 $ (1,059) $ (2,723) Net loss attributable to noncontrolling interests (1) — (67) (68) Interest expense, net 1,174 49 750 1,973 Provision (benefit) for income taxes 126 9 (224) (89) Other loss (income) (a) (176) (12) (45) (233) Loss on extinguishment of debt (b) 197 — — 197 Impairment charges 215 (33) 189 371 Depreciation and amortization 583 (5) 559 1,137 Stock-based compensation expense 78 1 26 105 Transaction costs and other operating costs (c) 268 (6) 71 333 Other items (d) 30 (2) 54 82 Adjusted EBITDA $ 737 $ 94 $ 254 $ 1,085 Year Ended December 31, 2019 (In millions) CEI Less: Divestitures (h) Pre-Acq. CEC (f) Total (i) Net income (loss) attributable to Caesars $ 81 $ (51) $ (1,195) $ (1,165) Net loss attributable to noncontrolling interests — — (3) (3) Provision (benefit) for income taxes 44 (37) (141) (134) Other loss (income) (a) (9) — 587 578 Loss on extinguishment of debt 8 — — 8 Interest expense, net 286 10 1,370 1,666 Depreciation and amortization 222 (29) 1,021 1,214 Impairment charges 1 — 468 469 Transaction costs and other operating costs (c) 37 (1) 136 172 Stock-based compensation expense 20 (1) 88 107 Other items (d) 7 — 80 87 Adjusted EBITDA $ 697 $ (109) $ 2,411 $ 2,999 44 Year Ended December 31, 2018 (In millions) CEI Less: Divestitures (h) Pre-Acq. CEC (f) Pre-Acq. Trop & Elgin (j) Total (i) Net income attributable to Caesars $ 95 $ (47) $ 303 $ 56 $ 407 Net income attributable to noncontrolling interests — — 1 — 1 Provision (benefit) for income taxes 40 (11) (121) 19 (73) Other loss (income) (a) 3 — (791) 1 (787) Loss on extinguishment of debt — — 1 1 2 Interest expense, net 172 (17) 1,346 2 1,503 Depreciation and amortization 157 (52) 1,145 64 1,314 Impairment charges 14 (14) 78 — 78 Transaction costs and other operating costs (c) 17 — 155 4 176 Stock-based compensation expense 13 (1) 79 — 91 Other items (d) 5 (1) 112 32 148 Adjusted EBITDA $ 516 $ (143) $ 2,308 $ 179 $ 2,860 ____________________ (a) Other loss (income) for the year ended December 31, 2020 primarily represents gains resulting from the change in the foreign currency exchange rate associated with restricted cash held in GBP and a derivative contract associated with our expected acquisition of William Hill, gains on William Hill UK and Flutter stock held by the Company and realized gain on conversion of CEC’s 5% convertible notes. Partially offsetting these gains is a loss on the change in fair value of the derivative liability related to CEC’s 5% convertible notes. Other loss (income) for the year ended December 31, 2019 primarily represents unrealized loss on the change in fair value of the derivative liability related to CEC’s 5% convertible notes. (b) Loss on extinguishment of debt for the year ended December 31, 2020 primarily represents loss on early repayment of debt in connection with the consummation of the Merger. Loss on extinguishment of debt for the year ended December 31, 2019 is related to the pro-rated write off of deferred financing costs associated with permanent payments on the ERI Term Loan. (c) Transaction costs and other operating costs for the years ended December 31, 2020 and 2019 primarily represent costs related to the Merger with Former Caesars, various contract or license termination exit costs, and severance costs. Transaction costs for the year ended December 31, 2018 primarily represent costs related to the Tropicana acquisition. (d) Other items include internal labor charges related to certain departed executives and contract labor and other miscellaneous items. (e) Discontinued operations include Horseshoe Hammond, Caesars Southern Indiana, Harrah’s Louisiana Downs, Caesars UK group including Emerald Resorts & Casino, and Bally’s Atlantic City. (f) Pre-acquisition CEC represents results of operations for Former Caesars for the period from January 1, 2020 to July 20, 2020, the date on which the Merger was consummated, for the year ended December 31, 2020, respectively, and for the years ended December 31, 2019 and 2018. Such figures are based on unaudited internal financial statements and have not been reviewed by the Company’s auditors and, for the 2020 periods, do not conform to GAAP. (g) 2020 Total for the year ended December 31, 2020 includes results of operations from discontinued operations and from Former Caesars prior to July 20, 2020, the date on which the Merger was consummated. Such presentation does not conform to GAAP or the Securities and Exchange Commission rules for pro forma presentation; however, we believe that the additional financial information will be helpful to investors in comparing current results with results of prior periods. This is non-GAAP data and should not be considered a substitute for data prepared in accordance with GAAP, but should be viewed in addition to the results of operations reported by the Company. (h) Divestitures for the year ended December 31, 2020 include results of operations for Kansas City and Vicksburg, Eldorado Shreveport, Harrah’s Reno, and Bally’s Atlantic City. Divestitures for the year ended December 31, 2019 and 2018 include results of operations for Presque, Nemacolin, Mountaineer, Cape Girardeau, Caruthersville, Kansas City, Vicksburg, Eldorado Shreveport, Harrah’s Reno and Bally’s Atlantic City. 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. (i) 2020, 2019, and 2018 Totals for the years ended December 31, 2020, 2019 and 2018 exclude results of operations from divestitures as detailed in (g) and includes results of operations from discontinued operations and from Former Caesars prior to July 20, 2020, the date, on which the Merger was consummated. Such presentation does not conform to GAAP or the Securities and Exchange Commission rules for pro forma presentation; however, we believe that the additional financial information will be helpful to investors in comparing current results with results of prior periods. This is non-GAAP data and should not be considered a substitute for data prepared in accordance with GAAP, but should be viewed in addition to our reported results of operations. (j) Pre-acquisition Trop & Elgin represents results of operations for Tropicana for the nine months ended September 30, 2018 and for Elgin for the period beginning January 1, 2018 and ending August 6, 2018. 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. Liquidity and Capital Resources We are a holding company and our only significant assets are ownership interests in our subsidiaries. Our ability to fund our obligations depends on existing cash on hand, contracted asset sales, cash flow from our subsidiaries and our ability to raise capital. Our primary sources of liquidity and capital resources have been existing cash on hand, cash flow from operations, borrowings under our revolving credit facilities, proceeds from the issuance of debt and equity securities and proceeds from completed asset sales and sale leaseback transactions. 45 Our cash requirements fluctuate significantly depending on our decisions with respect to business acquisitions or divestitures and strategic capital investments to maintain the quality of our properties. Our operating cash flows also significantly depend on our properties to remain open. As describe above, all of our casino properties were temporarily closed for the period from mid-March 2020 through mid-May 2020 due to orders issued by various government agencies and tribal bodies to reduce the spread of COVID-19. Beginning on May 15, 2020, we began reopening our properties and as of December 31, 2020 we have resumed operations at all of our properties, with the exception of additional temporary closures of Caesars Windsor, Harrah’s Philadelphia, and our properties in Illinois. In an effort to mitigate the impacts of COVID-19 public health emergency on our business and maintain liquidity, we furloughed approximately 90% of our employees beginning on April 11, 2020. A portion of the workforce has returned to service as the properties have resumed with limited capacities and in compliance with operating restrictions in accordance with governmental orders, directives and guidelines. As a result of these payroll changes combined with other cost saving measures, our operating expenses and operating cash flows were reduced significantly. In an effort to maintain liquidity and provide financial flexibility as the effects of COVID-19 public health emergency continued to evolve and impact global financial markets, we borrowed $465 million under our revolving credit facility on March 16, 2020, which we repaid utilizing, in part, proceeds from the sale of our interests in Kansas City and Vicksburg. Additionally, on June 19, 2020, we completed a public offering of 20,700,000 shares of Company Common Stock, at an offering price of $39.00 per share, which provided $772 million of proceeds, net of fees and estimated expenses of $35 million, for general corporate purposes. On July 1, 2020, we completed the sale of Kansas City and Vicksburg for $230 million and used a portion of the proceeds to repay the outstanding balance under our revolving credit facility. In addition, we closed the sale of Harrah’s Reno on September 30, 2020 which provided additional proceeds of $8 million, net of certain closing costs. On July 6, 2020, we issued $3.4 billion aggregate principal amount of 6.25% Senior Secured Notes due 2025 (the “CEI Senior Secured Notes”), $1.8 billion aggregate principal amount of 8.125% Senior Notes due 2027 (the “CEI Senior Notes”) and $1.0 billion aggregate principal amount of 5.75% Senior Secured Notes due 2025 (the “CRC Senior Secured Notes”). On July 20, 2020, in connection with the Merger, we consummated certain sale leaseback transactions with VICI with respect to Harrah’s New Orleans, Harrah’s Laughlin and Harrah’s Resort Atlantic City, including the Harrah’s Atlantic City Waterfront Conference Center, for approximately $1.8 billion of net proceeds. Additionally, we received a one-time payment from VICI of approximately $1.4 billion for amendments to the VICI Leases. Furthermore, we entered into an incremental agreement to the existing CRC credit agreement, for an incremental term loan in an aggregate principal amount of $1.8 billion. In connection with the consummation of the Merger, on July 20, 2020, our current and future liquidity significantly changed. A portion of the proceeds from our newly issued debt and proceeds we received from VICI, as well as cash on hand generated from the sale of Company Common Stock, were used (a) to fund a portion of the cash consideration of the Merger, (b) to prepay in full the loans outstanding and terminate all commitments under our existing credit agreement, dated as of April 17, 2017, (c) to satisfy and discharge our Senior Notes, (d) to repay $975 million of the outstanding amount under the existing CRC Revolving Credit Facility, (e) to repay in full the loans outstanding and terminate all commitments under the existing CEOC, LLC credit agreement, dated as of October 6, 2017, (f) to pay fees and expenses related to the financing arrangements, and (g) for general corporate purposes. Additionally, we entered into the CEI Revolving Credit Facility which provides for a five-year senior secured revolving credit facility in an aggregate principal amount of $1.2 billion, that matures in 2025. On September 18, 2020, we entered into a $400 million loan agreement with a subsidiary of VICI for a term of five years, with such loan secured by, among other things, a first priority fee mortgage on the Caesars Forum Convention Center (the “Forum Convention Center Mortgage Loan”). The interest rate on the Forum Convention Center Mortgage Loan is initially 7.7% per annum, which escalates annually to a maximum interest rate of 8.3% per annum. After the second anniversary of the closing of the loan, we have the option of prepaying the loan, which may include a premium. As of December 31, 2020, our cash on hand and revolving borrowing capacity were as follows: (In millions) December 31, 2020 Cash and cash equivalents $ 1,758 Revolver capacity 2,210 Revolver capacity committed to letters of credit (84) Total $ 3,884 On September 30, 2020, we announced that we had reached an agreement with William Hill 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, in an all-cash transaction of approximately £2.9 billion, or $3.7 billion. As required 46 by UK regulations, we were required to provide a cash confirmation of funding for our potential acquisition of William Hill. In support of the confirmation process, on September 25, 2020, we borrowed $900 million on our CEI Revolving Credit Facility. The transaction remains conditional on, among other things, approvals from state, federal and international regulators. We entered into a foreign exchange forward contract to hedge the risk of appreciation of the GBP denominated purchase price for the proposed William Hill acquisition. Under the agreement, we have agreed to purchase £536 million at a contracted exchange rate. The forward term of the contract ends on March 31, 2021. On October 1, 2020, we completed a public offering of 35,650,000 shares of Company Common Stock at an offering price of $56.00 per share. Net proceeds from the offering, after deducting the underwriting discounts and commissions and estimated expenses, were approximately $1.9 billion which we intend to use for general corporate purposes, including to finance a portion of the proposed William Hill acquisition. As of December 31, 2020 , we have restricted cash of approximately $1.9 billion which we expect to apply to pay a portion of the purchase price of the acquisition. On October 6, 2020, we entered into a £1.5 billion Interim Facilities Agreement with Deutsche Bank AG, London Branch and JPMorgan Chase Bank, N.A. Pursuant to the Interim Facilities Agreement, such lenders have made available to the Company: (a) a 540-day £1.0 billion asset sale bridge facility and (b) a 60-day £503 million cash confirmation bridge facility (collectively, the “Facility”). The Facility may be used to finance the acquisition, refinance or otherwise discharge the indebtedness of William Hill and its subsidiaries, pay transaction fees and expenses related to the foregoing and for working capital and general corporate purposes, among other things. The availability of the borrowings under the Facility is subject to the satisfaction of certain customary conditions. If drawn upon, outstanding borrowings under the Facility will bear interest at a rate equal to the London interbank offered rate plus 3.50% per annum. We entered into the Interim Facilities Agreement in connection with requirement under applicable United Kingdom law to demonstrate that we have “funds certain” to pay the entirety of the cash purchase price for the proposed acquisition of William Hill. We do not intend to borrow under the Interim Facilities Agreement. Instead, we intend to negotiate long-form financing documentation pursuant to which a subsidiary will incur the Debt Financing for the acquisition. In addition to the capital required to complete the proposed acquisition of William Hill, we expect that our primary capital requirements going forward will relate to the operation and maintenance of our properties, taxes, servicing our outstanding indebtedness, and rent payments under the 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 2021 are expected to significantly increase as a result of the additional properties acquired in the Merger and new development projects. We also funded $400 million to escrow as of the closing of the Merger and will utilize those funds in accordance with a three year capital expenditure plan in the state of New Jersey, and an additional $25 million was funded in the fourth quarter of 2020 for improvements at our racing properties within the state of Indiana. These amounts are currently included in restricted cash. We are also in the process of a more than $47 million renovation to the resort rooms and suites of Silver Legacy Resort Casino, projected to be completed by summer 2021. In relation to the extension of the casino operating contract and ground lease for Harrah’s New Orleans (see Note 11), we are required to make a capital investment of $325 million by July 15, 2024. Cash spent for capital expenditures totaled $163 million, $171 million, $147 million for the years ended December 31, 2020, 2019 and 2018, respectively, related to our growth and maintenance capital projects. The following table summarizes our estimates for 2021 capital expenditures: (In millions) Low High Atlantic City $ 175 $ 225 Indiana 5 15 Total estimated capital expenditures from restricted cash 180 240 Lake Charles 75 125 New Orleans 25 50 Other growth and maintenance projects (a) 325 350 Total estimated capital expenditures from unrestricted cash and insurance proceeds 425 525 Total estimated capital expenditures in 2021 $ 605 $ 765 ____________________ (a) Includes capital expenditures that may be incurred at our Atlantic City, Indiana and Lake Charles properties for normal maintenance projects in addition to amounts described above. On August 27, 2020, Hurricane Laura made landfall on Lake Charles as a Category 4 storm. The hurricane severely damaged the Isle of Capri Casino Lake Charles, as a result of which the Company has recorded an insurance receivable of $44 million, of 47 which $15 million related to fixed asset impairments and $29 million related to remediation costs and repairs that have been incurred in the year ended December 31, 2020 . The property will remain closed until construction of a new land-based casino is complete. A significant portion of our liquidity needs are for debt service and payments associated with our leases. In addition to our newly issued debt, our debt obligations increased as a result of outstanding debt of Former Caesars that remained outstanding following the consummation of the Merger. Our estimated debt service (including principal and interest) is approximately $907 million for 2021. We also lease certain real property assets from third parties, including GLPI and VICI. We estimate our lease payments to be approximately $1.1 billion for 2021. The 5% Convertible Notes (defined below) remain outstanding following the consummation of the Merger. As a result of the Merger, the 5% Convertible Notes are convertible into weighted average of the number of shares of Company Common Stock and the amount of cash actually received per share by holders of common stock of Former Caesars that made elections for consideration in the Merger. The 5% Convertible Notes are convertible at any time at the option of the holders thereof or the Company. We do not intend to exercise our option to cause the conversion of the 5% Convertible Notes prior to maturity. As of December 31, 2020, we have paid approximately $903 million and issued approximately 10.8 million shares upon conversion of $770 million in aggregate principal amount of the 5% Convertible Notes during 2020. At such time as the holders of the 5% Convertible Notes elect to cause conversion, we estimate using cash of $379 million and issuing 4.5 million shares to settle the remaining outstanding 5% Convertible Notes as of December 31, 2020. On April 24, 2020, the Company entered into a definitive purchase agreement with Twin River and certain of its affiliates for the sale of the equity interests of Eldorado Resort Casino Shreveport Joint Venture and Columbia Properties Tahoe, LLC, the entities that hold Eldorado Shreveport and MontBleu, respectively, for aggregate consideration of $155 million, subject to a customary working capital adjustment. The definitive agreement provides that the consummation of the sale is subject to satisfaction of customary conditions, including receipt of required regulatory approvals. On December 23, 2020, the Company consummated the sale of Eldorado Shreveport to Bally's Corporation for $140 million resulting in a gain of $29 million. MontBleu is expected to close in the first half of 2021. On September 3, 2020, the Company and VICI entered into agreement to sell Harrah’s Louisiana Downs with Rubico Acquisition Corp. for $22 million, subject to a customary working capital adjustment, where the proceeds will be split between the Company and VICI. The sale is subject to satisfaction of customary conditions, including receipt of required regulatory approvals and is expected to close in the first half of 2021. We previously reached an agreement with VICI and closed the sale of Bally’s Atlantic City Hotel & Casino to Bally’s Corporation for $25 million on November 18, 2020 . The proceeds from the sale were split between the Company and VICI, and the Company received $5 million of net proceeds. In addition, on October 9, 2020, we reached an agreement to sell the Bally’s brand to Bally’s Corporation Worldwide Holding, Inc. for $20 million , while retaining the right to use the brand within Bally’s Las Vegas into perpetuity. On October 27, 2020, the Company entered into an agreement to sell Evansville to GLPI and Twin River for $480 million in cash, subject to a customary working capital adjustment. The sale is subject to satisfaction of customary conditions, including receipt of required regulatory approvals and is expected to close in mid-2021. On December 1, 2020, the Company entered into a definitive agreement with CQ Holding Company, Inc. to sell the equity interests of Baton Rouge. The definitive agreement provides that the consummation of the sale is subject to satisfaction of customary conditions, including receipt of required regulatory approvals and is expected to close in mid-2021. On December 24, 2020, the Company entered into an agreement to sell Caesars Southern Indiana to the EBCI for $250 million, subject to a customary working capital adjustment. The sale is subject to satisfaction of customary conditions, including receipt of required regulatory approvals and is expected to close in the third quarter of 2021. In addition to the agreements above, we also expect to enter into additional agreements to divest of Horseshoe Hammond prior to December 31, 2021 . Further, we expect to enter into agreements to sell several other non-core properties including our international properties within our Caesars UK group, which includes Emerald Resorts Casino. We expect these divestitures to close by mid-year 2021. 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, 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 48 indebtedness for the next twelve months. However, the COVID-19 public health emergency has had, and is expected to continue to have, an adverse effect on our business, financial condition and results of operations and has caused, and may continue to cause, disruption in the financial markets. While we have undertaken efforts to mitigate the impacts of COVID-19 on our business and maintain liquidity, the extent of the ongoing and future effects of the COVID-19 public health emergency on our business, results of operations and financial condition is uncertain and may adversely impact our liquidity in the future. Our ability to access additional capital may be adversely affected by the disruption in the financial markets caused by the COVID-19 public health emergency, restrictions on incurring additional indebtedness contained in the agreements governing our indebtedness and the impact of the public health emergency on our business, results of operations and financial condition. Debt and Master Lease Covenant Compliance The CRC Credit Agreement, the CEI Revolving Credit Facility and the indentures related to the CRC Senior Notes and CEI Senior Secured 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 covenants in the indenture for the 5% Convertible Notes are limited as a result of amendments that became effective in connection with the consummation of the Merger. The CRC Revolving Credit Facility and CEI Revolving Credit Facility include a maximum first-priority net senior secured leverage ratio financial covenant of 6.35:1, which is applicable solely to the extent that certain testing conditions are satisfied. Failure to comply with such covenants could result in an acceleration of the maturity of indebtedness outstanding under the relevant debt documents. The Company’s results of operations have been materially adversely affected by the impacts of the COVID-19 public health emergency. As a result, the current terms of the CRC Credit Agreement and the CEI Credit Agreement provide that the financial covenant measurement period is not effective through September 30, 2021 so long as CRC and the Company, respectively, comply with a minimum liquidity requirement, which includes any such availability under the applicable revolving credit facilities. The GLPI Master Lease contains certain operating, capital expenditure and financial covenants thereunder, and our ability to comply with these covenants was negatively impacted by the effects of the COVID-19 public health emergency on our results of operations. On June 15, 2020, we entered into an amendment to the GLPI Master Lease which provides certain relief under these covenants in the event of facility closures due to public health emergencies, governmental restrictions and certain other instances of unavoidable delay. On July 17, 2020, the amendment to the GLPI Master Lease became effective as the Company obtained all necessary approvals and the applicable waiting period expired. Furthermore, the Company obtained waivers from VICI with relation to annual capital expenditure requirements for 2020. As of December 31, 2020, we were in compliance with all of the applicable financial covenants under the CEI Credit Agreement, CEI Senior Secured Notes, CRC Credit Agreement, CEI Senior Notes, CRC Senior Secured Notes, 5% Convertible Notes, the GLPI Leases and VICI Leases. Share Repurchase Program On November 8, 2018, we issued a press release announcing that our Board has authorized a $150 million common stock repurchase program (the “Share Repurchase Program”) pursuant to which we may, from time to time, repurchase shares of common stock on the open market (either with or without a 10b5-1 plan) or through privately negotiated transactions. The Share Repurchase Program has no time limit and may be suspended or discontinued at any time without notice. There is no minimum number of shares of common stock that we are required to repurchase under the Share Repurchase Program. As of December 31, 2020, 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 years ended December 31, 2020 or 2019. 49 Debt Obligations and Leases New Debt Transactions We were party to a credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto dated as of April 17, 2017 (as amended, the “ERI Credit Facility”), consisting of a $1.5 billion term loan facility and a $500 million revolving credit facility. In an effort to maintain liquidity and provide financial flexibility as the effects of COVID-19 continued to evolve and impact global financial markets, we borrowed $465 million under the ERI Credit Facility on March 16, 2020, which we repaid in July 2020 utilizing, in part, proceeds from the sale of our interests in Kansas City and Vicksburg. On July 6, 2020, Colt Merger Sub, Inc., a wholly-owned subsidiary of the Company (“Escrow Issuer”) issued $3.4 billion aggregate principal amount of 6.25% Senior Secured Notes due 2025, $1.8 billion aggregate principal amount of 8.125% Senior Notes due 2027 and $1.0 billion aggregate principal amount of 5.75% Senior Secured Notes due 2025. On July 20, 2020, in connection with the closing of the Merger, the Company entered into a new credit agreement which provides a five-year senior secured revolving credit facility in an aggregate principal amount of $1.2 billion. In addition, Caesars Resort Collection, LLC, which became a wholly-owned subsidiary of the Company as a result of the Merger (“CRC”), entered into incremental agreements to the CRC Credit Agreement (described below) for an aggregate principal amount of $1.8 billion. A portion of the proceeds from these arrangements was used to prepay in full the loans outstanding and terminate all commitments under the ERI Credit Facility, and to satisfy and discharge the Company’s 6% Senior Notes due 2025, 6% Senior Notes due 2026, and the 7% Senior Notes due 2023. The 6% Senior Notes due 2025 were redeemed at a redemption price of 104.5%, the 7% Senior Notes due 2023 were redeemed at a redemption price of 103.5%, and $210 million aggregate principal amount of the 6% Senior Notes due 2026 was redeemed at a redemption price of 106% with the remaining balance redeemed at a redemption price of 100% of the aggregate principal amount thereof plus the Applicable Premium, as defined in the indenture for the 6% Senior Notes due 2026. The redemption of these senior notes resulted in a loss on extinguishment of $132 million during the year ended December 31, 2020, which is recorded within Loss on extinguishment of debt on the Statement of Operations. CEI Senior Secured Notes due 2025 On July 6, 2020, Escrow Issuer issued $3.4 billion in aggregate principal amount of 6.25% CEI 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. In connection with the consummation of the Merger, we assumed the rights and obligations under the CEI Senior Secured Notes and the indenture governing the CEI Senior Secured 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, commencing January 1, 2021. CEI Senior Notes due 2027 On July 6, 2020, Escrow Issuer issued $1.8 billion in aggregate principal amount of 8.125% Senior Notes due 2027 pursuant to an indenture, dated July 6, 2020 (the “CEI Senior Notes”), by and between the Escrow Issuer and U.S. Bank National Association, as trustee. We assumed the rights and obligations under the CEI Senior Notes and the indenture governing the CEI Senior Notes on July 20, 2020. The CEI Secured Notes will mature on July 1, 2027 with interest payable semi-annually in cash in arrears on January 1 and July 1 of each year, commencing January 1, 2021. CRC Senior Secured Notes due 2025 On July 6, 2020, Escrow Issuer issued $1.0 billion in aggregate principal amount of 5.75% Senior Notes due 2025 pursuant to an indenture, dated July 6, 2020 (the “CRC Senior Secured Notes”), by and among the Escrow Issuer, U.S. Bank National Association, as trustee and Credit Suisse AG, Cayman Islands Branch, as collateral agent. CRC assumed the rights and obligations under the CRC Senior Secured Notes and the indenture governing the CRC Senior Secured Notes on July 20, 2020. The CRC Senior Secured Notes will mature on July 1, 2025 with interest payable semi-annually in cash in arrears on January 1 and July 1 of each year, commencing January 1, 2021. 50 CEI Revolving Credit Facility On July 20, 2020, we entered into a new credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, U.S. Bank National Association, as collateral agent, and certain banks and other financial institutions and lenders party thereto, as well as an incremental amendment thereto, which provide for a five-year CEI Revolving Credit Facility for an aggregate principal amount of $1.2 billion. The CEI Revolving Credit Facility matures in 2025 and includes a letter of credit sub-facility of $250 million. The interest rate per annum applicable under the CEI Revolving Credit Facility, at the Company’s option is either (a) LIBOR adjusted for certain additional costs, subject to a floor of 0% or (b) a base rate determined by reference to the highest of (i) the federal funds rate plus 0.50%, (ii) the prime rate as determined by JPMorgan Chase Bank, N.A. and (iii) the one-month adjusted LIBOR rate plus 1.00%, in each case plus an applicable margin. Such applicable margin shall be 3.25% per annum in the case of any LIBOR loan and 2.25% per annum in the case of any base rate loan, subject to three 0.25% step-downs based on the Company’s total leverage ratio. Additionally, we are required to pay a commitment fee in respect of any unused commitments under CEI Revolving Credit Facility in the amount of 0.50% of principal amount of the commitments of all lenders, subject to a step-down to 0.375% based upon the Company’s total leverage ratio. We are also required to pay customary agency fees as well as letter of credit participation fees computed at a rate per annum equal to the applicable margin for LIBOR borrowings on the dollar equivalent of the daily stated amount of outstanding letters of credit, plus such letter of credit issuer’s customary documentary and processing fees and charges and a fronting fee in an amount equal to 0.125% of the daily stated amount of such letter of credit. We had $1.2 billion of available borrowing capacity, after consideration of $19 million in outstanding letters of credit under CEI Revolving Credit Facility, as of December 31, 2020. As of December 31, 2020, there were no borrowings outstanding under the CEI Revolving Credit Facility. Convention Center Mortgage Loan On September 18, 2020, we entered into a loan agreement with VICI to borrow a five-year, $400 million Forum Convention Center mortgage loan (the “Mortgage Loan”). The Mortgage Loan bears interest at a rate of, initially, 7.7% per annum, which escalates annually to a maximum interest rate of 8.3% per annum. Lumière Loan The Company borrowed $246 million from GLPI to fund the purchase price of the real estate underlying Lumière, which was scheduled to mature on October 1, 2020. On June 24, 2020, the Company received approval from Missouri Gaming Commission to sell the real estate underlying Lumière to GLPI and leaseback the property under a long-term financing obligation. As of December 31, 2020, the Lumière loan has been satisfied in full and the real estate has been refinanced under a financing obligation. See Note 10 . Assumed Debt Activity Former Caesars and its subsidiaries incurred the following indebtedness that remained outstanding following the consummation of the Merger. CRC Term Loans and CRC Revolving Credit Facility In connection with the Merger, we assumed the CRC senior secured credit facility (the “CRC Senior Secured Credit Facilities”), which included a $1.0 billion five-year revolving credit facility (the “CRC Revolving Credit Facility”) and an initial $4.7 billion seven-year first lien term loan (the “CRC Term Loan”), 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 Revolving Credit Facility matures in 2022 and includes a letter of credit sub-facility. The CRC Term Loan matures in 2024. The CRC Incremental Term Loan matures in 2025. Each of 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 credit agreement for the CRC Revolving Credit Facility also includes customary voluntary and mandatory prepayment provisions, subject to certain exceptions. As of December 31, 2020, approximately $65 million was committed to outstanding letters of credit. As of December 31, 2020, there were no borrowings outstanding under the CRC Revolving Credit Facility. Borrowings under the CRC Credit Agreement bear interest at a rate equal to either (a) LIBOR adjusted for certain additional costs, subject to a floor of 0% or (b) a base rate determined by reference to the highest of (i) the federal funds rate plus 0.50%, 51 (ii) the prime rate as determined by Credit Suisse AG, Cayman Islands Branch, as administrative agent under the CRC Credit Agreement and (iii) the one-month adjusted LIBOR rate plus 1.00%, in each case plus an applicable margin. Such applicable margin shall be (a) with respect to the CRC Term Loan, 2.75% per annum in the case of any LIBOR loan or 1.75% per annum in the case of any base rate loan, (b) with respect to the CRC Incremental Term Loan, 4.50% per annum in the case of any LIBOR loan or 3.50% in the case of any base rate loan and (c) in the case of the CRC Revolving Credit Facility, 2.25% per annum in the case of any LIBOR loan and 1.25% per annum in the case of any base rate loan, subject in the case of the CRC Revolving Credit Facility to two 0.125% step-downs based on CRC’s senior secured leverage ratio, the ratio of first lien senior secured net debt to adjusted earnings before interest, taxes, depreciation and amortization. The CRC Revolving Credit Facility is subject to a financial covenant discussed below. 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 senior secured leverage ratio. 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. CRC Notes On October 16, 2017, CRC issued $1.7 billion aggregate principal amount of 5.25% senior notes due 2025 (the “CRC Notes”). Former Caesars 5% Convertible Notes On October 6, 2017, Former Caesars issued $1.1 billion aggregate principal amount of 5.00% convertible senior notes maturing in 2024 (the “5% Convertible Notes”). The 5% Convertible Notes are convertible into weighted average of the number of shares of Company Common Stock and amount of cash actually received per share by holders of common stock of Former Caesars that made elections for consideration in the Merger. As of December 31, 2020, we have paid approximately $903 million and issued approximately 10.8 million shares upon conversion of $770 million of the 5% Convertible Notes during 2020. The Company has determined that the 5% Convertible Notes contain derivative features that require bifurcation. The Company separately accounts for the liability component and equity conversion option of the 5% Convertible Notes. The portion of the overall fair value allocated to the liability was calculated by using a market-based approach without the conversion features included. The difference between the overall instrument value and the value of the liability component was assumed to be the value of the equity conversion option component. The value of the liability is determined based on a discounted cash flow of the debt instrument. See Note 8 for more information on the 5% Convertible Notes’ fair value measurements. Net amortization of the debt issuance costs and the discount and/or premium associated with the Company’s indebtedness totaled $80 million, $8 million and $6 million for the years ended December 31, 2020, 2019 and 2018, respectively. Amortization of debt issuance costs is computed using the effective interest method and is included in interest expense. VICI Leases Upon consummation of the Merger, we assumed obligations of certain real property assets leased from VICI by Former Caesars under the following agreements: (i) for a portfolio of properties at various locations throughout the United States (the “Non-CPLV lease”), (ii) for Caesars Palace Las Vegas (the “CPLV lease”), (iii) for Harrah’s Joliet Hotel & Casino (the “Joliet Lease”) and (iv) for Harrah’s Las Vegas (the “HLV Lease”). These lease agreements provided for annual fixed rent (subject to escalation) of $773 million during an initial period, then rent consisting of both base rent and variable rent elements. The lease agreements had a 15-year initial term and four five-year renewal options. The lease agreements included escalation provisions beginning in year two of the initial term and continuing through the renewal terms. The lease agreements also included provisions for variable rent payments calculated, in part, based on increases or decreases of net revenue of the underlying lease properties, commencing in year eight of the initial term and continuing through the renewal terms. Former Caesars entered into a Golf Course Use Agreement with VICI, which has a 35-year term (inclusive of all renewal periods), pursuant to which such affiliates of the Company agreed to pay (i) an annual payment of $10 million, subject to escalation, (ii) an annual use fee of $3 million, subject to escalation beginning in the second year, and (iii) certain per-round fees, all as more particularly set forth in the Golf Course Use Agreement. In connection with the closing of the Merger on July 20, 2020, we consummated a series of transactions with VICI and certain of its affiliates in accordance with the MTA entered on June 24, 2019 and certain purchase and sales agreement entered on 52 September 26, 2019. We consummated sale leaseback transactions related to Harrah’s New Orleans, Harrah’s Laughlin and Harrah’s Resort Atlantic City, including the Harrah’s Atlantic City Waterfront Conference Center, for approximately $1.8 billion of net proceeds. The CPLV Lease with VICI was amended, among other things, (i) add Harrah’s Las Vegas (“HLV”) to the leased premises thereunder (and in connection therewith HLV Lease was terminated), (ii) add (subject to certain adjustments) the rent payable with respect to HLV under such terminated stand-alone lease to such lease and further increase the annual rent payable with respect to HLV by approximately $15 million, (iii) increase the annual rent with respect to CPLV by approximately $84 million and (iv) extend the term of such lease so that following the amendment of such lease there will be 15 years remaining until the expiration of the initial term. In addition, Harrah’s New Orleans, Harrah’s Laughlin, and Harrah’s Resort Atlantic City, including the Harrah’s Atlantic City Waterfront Conference Center, were added to the Non-CPLV lease (as amended, the “Regional Lease”) and such lease was further amended to increase the annual rent thereunder by $154 million in the aggregate related to such added properties and extend the term of such lease so that following the amendment of such lease there will be 15 years remaining until the expiration of the initial term. Furthermore, the Joliet Lease, as well as the term of the Golf Course Use Agreement, were extended such that there will be 15 years remaining until the expiration of the initial term. On December 24, 2020, the Company entered into agreement to sell Caesars Southern Indiana to the Eastern Band of Cherokee Indians (“EBCI”) for $250 million, subject to a customary working capital adjustment. Caesar’s annual payments to VICI Properties under the Regional Lease will decline by $33 million upon closing of the transaction. Our VICI lease is accounted for as a financing obligation and totaled $11.0 billion as of December 31, 2020. Furthermore, we obtained waivers from VICI with relation to annual capital expenditure requirements for 2020. See Note 10 to our Consolidated Condensed Financial Statements for additional information about our VICI Lease and related matters. GLPI Leases Our GLPI Master Lease is accounted for as a financing obligation and totaled $1.2 billion as of December 31, 2020. Additionally, our GLPI Master Lease contains certain operating, capital expenditure and financial covenants thereunder, and our ability to maintain compliance with these covenants was also negatively impacted. On June 15, 2020, we entered into an amendment to the GLPI Master Lease which, among other things, provides certain relief under these covenants in the event of facility closures due to pandemics, governmental restrictions and certain other instances of unavoidable delay. As of July 17, 2020, the amendment to the GLPI Master Lease became effective as we obtained all necessary approvals and the applicable waiting period expired. See Note 10 to our Consolidated Condensed Financial Statements for additional information about our GLPI Master Lease and related matters. Other Liquidity Matters We are faced with certain contingencies involving litigation and environmental remediation and compliance. These commitments and contingencies are discussed in greater detail in “ Part I, Item 3. Legal Proceedings ” and Note 11 to our consolidated financial statements, both of which are included elsewhere in this Annual Report on Form 10-K. In addition, new competition may have a material adverse effect on our revenues and could have a similar adverse effect on our liquidity. See “ Part I, Item 1A. Risk Factors—Risks Related to Our Business ” which is included elsewhere in this Annual Report on Form 10-K. Critical Accounting Policies and Estimates We prepare our financial statements in conformity with GAAP. In preparing our financial statements, we have made our best estimates and judgments of the amounts and disclosures included in the financial statements, giving regard to materiality. When more than one accounting principle, or method of its application, is generally accepted, we select the principle or method that we consider to be the most appropriate under specific circumstances. Application of these accounting principles requires us to make estimates about the future resolution of existing uncertainties. Certain of our accounting policies, including those in connection with business combinations, certain fair value measurements, income taxes, long-lived assets, goodwill and indefinite lived intangible assets, allowance for doubtful accounts related to certain gaming receivables, self-insurance reserves, and litigation, claims and assessments require that we apply significant judgment in defining the appropriate assumptions for calculating financial estimates. We consider accounting estimates to be critical accounting policies when: • the estimates involve matters that are highly uncertain at the time the accounting estimate is made; and • different estimates or changes to estimates could have a material impact on the reported financial position, changes in financial position, or results of operations. 53 By their nature, these judgments and estimates are subject to an inherent degree of uncertainty. Our judgments and estimates are based on our historical experience, terms of existing contracts, observance of trends in the industry, information gathered from customer behavior, and information available from other outside sources, as appropriate. Due to the inherent uncertainty involving judgments and estimates, actual results may differ from those estimates. Our most critical accounting estimates and assumptions are in the following areas: Business Combinations We applied the provisions of Accounting Standards Codification (“ASC”) Topic 805, “Business Combinations,” in the accounting for our acquisitions of Former Caesars, Tropicana, Elgin and our previous acquisitions. It required us to recognize the assets acquired and the liabilities assumed at their acquisition date fair values, which were determined using market, income, and cost approaches, or a combination. Goodwill as of the respective acquisition dates was measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. Goodwill is generally the result of expected synergies of the combined company or an assembled workforce. Indefinite-lived intangible assets acquired primarily include trademarks, Caesars Rewards acquired in the Merger, customer relationships and gaming rights. The fair value for these intangible assets was determined using either the relief from royalty method and excess earnings method under the income approach or a replacement cost market approach. Trademarks and Caesars Rewards were valued using the relief from royalty method, which presumes that without ownership of such trademarks or loyalty program, we would have to make a stream of payments to a brand or franchise owner in return for the right to use their name or program. By virtue of this asset, we avoid any such payments and record the related intangible value of the Company’s ownership of the brand name or program. Customer relationships were valued using the cost approach and the incremental cash flow method under the income approach. The incremental cash flow method compares 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. Gaming rights include our gaming licenses in various jurisdictions and may have indefinite lives or an estimated useful life. The fair value of the gaming rights was determined using the excess earnings or replacement cost methodology, based on whether the license resides in gaming jurisdictions where competition is limited to a specified number of licensed gaming operators. The excess earnings methodology is an income approach methodology that estimates the projected cash flows of the business attributable to the gaming license intangible asset, which is net of charges for the use of other identifiable assets of the business including working capital, fixed assets and other intangible assets. The replacement cost of the gaming license was used as an indicator of fair value. 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 acquisition date. Assets and liabilities held for sale are recorded at fair value, less costs to sell, based on the agreements reached as of the acquisition date, or an income approach. The fair value of the financing obligations were calculated as the net present value of both the fixed base rent payments and the forecasted variable payments plus the expected residual value of the land and building returned at the end of the expected usage period. The fair value of land was determined using the sales comparable approach. The market data is then adjusted for any significant differences, to the extent known, between the identified comparable sites and the site being valued. The value of building and site improvements was estimated via the income approach. Other personal property assets such as furniture, gaming and computer equipment, fixtures, computer software, and restaurant equipment were valued using the cost approach which is based on replacement or reproduction costs of the asset. The cost approach is an estimation of fair value developed by computing the current cost of replacing a property and subtracting any depreciation resulting from one or more of the following factors: physical deterioration, functional obsolescence, and/or economic obsolescence. Cash flow estimates are significant to many valuations described above and may include forecasts with assumptions regarding factors such as recent and budgeted operating performance, future growth rates, and the determination of appropriate discount rates to estimate fair value. These inputs involve significant assumptions including the future effects of COVID-19 as well as the realization of synergies anticipated from a business combination, which may not be realized as projected. Certain assumptions, such as the effects of COVID-19, may be beyond our control. 54 Fair Value Measurements The 5% Convertible Notes contain derivative features that require bifurcation. We estimate the fair value of the 5% Convertible Notes using a market-based approach that incorporates the value of both straight debt and conversion features of the notes. The valuation model incorporates actively traded prices of the 5% Convertible Notes as of the reporting date, the value of CEI’s equity into which these notes could convert, and assumptions regarding the incremental cost of borrowing for CEI. The fair value of the 5% Convertible Notes derivative liability is subject to interest rate and market price risk due to the conversion features of the notes and other factors. Generally, as the fair value of fixed interest rate debt increases (due to a decrease in interest rates) the derivative liability decreases and as the fair value of fixed interest rate debt decreases (due to an increase in interest rates) the derivative liability increases. The fair value of the 5% Convertible Notes derivative liability may also increase as the market price of our stock rises or due to increased volatility in our stock price which will result in a loss recognized in our Statement of Operations, and decrease as the market price of our stock falls or due to decreased volatility in our stock price which will result in income recognized in our Statement of Operations. On October 6, 2017, Former Caesars issued $1.1 billion aggregate principal amount of 5% Convertible Notes. As of December 31, 2020, the fair value of the derivative associated with the 5% Convertible Notes was $326 million when the price per share of our common stock was $74.27. During the year ended December 31, 2020, we recognized a loss of $111 million associated to the changes in fair value of the derivative as a result of fluctuations in the share price of our common stock. We use interest rate swaps, which are derivative instruments classified as hedging transactions, to limit our exposure to interest rate risk. Derivative instruments are recognized in the financial statements at fair value. The estimated fair values of our derivative instruments are based on market prices obtained from dealer quotes. Such quotes represent the estimated amounts we would receive or pay to terminate the contracts. Our derivative instruments contain a credit risk that the counterparties may be unable to meet the terms of the agreements. We minimize that risk by evaluating the creditworthiness of our counterparties, which are limited to major banks and financial institutions. The fair values of our derivative instruments are 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. See Note 8 for more details regarding fair value measurements and Item 7A for quantitative and qualitative disclosures about market risk. Income Taxes We and our subsidiaries file income tax returns with federal, state and foreign jurisdictions. Our income tax returns are subject to examination by the Internal Revenue Service (“IRS”) and other tax authorities. Positions taken in tax returns are sometimes subject to uncertainty in the tax laws and may not ultimately be accepted by the IRS or other tax authorities. See Note 17 in the accompanying consolidated financial statements for a discussion of the status and impact of examinations by tax authorities. We record income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the expected future tax consequences of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and as attributable to operating loss and tax credit carryforwards. We reduce the carrying amounts of deferred tax assets by a valuation allowance if, based on the available evidence, it is more likely than not that such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed periodically based on the “more likely than not” realization threshold. This assessment considers, among other matters, the nature, frequency, and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carryforward periods, our experience with operating loss and tax credit carryforwards not expiring unused, and tax planning alternatives. When there is a recent history of operating losses and negative normalized earnings and a return to operating profitability has not yet been demonstrated, we cannot rely on projections of future taxable earnings for purposes of assessing recoverability of our deferred tax assets. In such cases, we use systematic and logical methods to estimate when deferred tax liabilities will reverse and generate taxable income and when deferred tax assets will reverse and generate tax deductions. Our most significant deferred tax asset relates to the failed sale-leaseback obligation with VICI and GLPI (see Note 10). The reversal of this deferred tax asset requires judgment and estimates and has a material impact on the determination of the amount of valuation allowance required. Under the applicable accounting standards, we may recognize the tax benefit from an uncertain tax position only if it is more-likely-than-not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The accounting standards also provide guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and disclosure requirements for uncertain tax positions. 55 Long-Lived Assets We have significant capital invested in our long-lived assets, and judgments are made in determining the estimated useful lives of assets, salvage values to be assigned to assets, and if or when an asset has been impaired. The accuracy of these estimates affects the amount of depreciation and amortization expense recognized in our financial results and whether we have a gain or loss on the disposal of an asset. We assign lives to our assets based on our standard policy, which is established by management as representative of the useful life of each category of asset. We review the carrying value of our long-lived assets whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. The factors considered by management in performing this assessment include current operating results, trends and prospects, planned construction and renovation projects, as well as the effect of obsolescence, demand, competition, and other economic, legal, and regulatory factors. In estimating expected future cash flows for determining whether an asset is impaired, assets are grouped at the lowest level of identifiable cash flows, which, for most of our assets, is the individual property. See Note 6 for additional information. Goodwill and Other Indefinite-lived Intangible Assets Assessing goodwill and indefinite-lived intangible assets for impairment is a process that requires significant judgment and involves detailed qualitative and quantitative business-specific analysis and many individual assumptions which fluctuate between assessments. We determine the estimated fair value of each reporting unit based on a combination of EBITDA, valuation multiples, and estimated future cash flows discounted at rates commensurate with the capital structure and cost of capital of comparable market participants, giving appropriate consideration to the prevailing borrowing rates within the casino industry in general. We also evaluate the aggregate fair value of all of our reporting units and other non-operating assets in comparison to our aggregate debt and equity market capitalization at the test date. EBITDA multiples and discounted cash flows are common measures used to value businesses in our industry. We determine the fair value of our indefinite-lived intangible assets using either the relief from royalty method or the excess earnings method under the income approach or replacement cost market approach. The determination of fair value of our reporting units and indefinite-lived intangible assets requires management to make significant assumptions and estimates around the forecasts as well as the selection of discount rates and valuation multiples. Changes in these estimates could have a significant impact on the fair value of our reporting units and intangible assets and the amount of goodwill or indefinite-lived intangible asset impairments, if any. Forecasts and the determination of appropriate discount rates and valuation multiples used to determine the fair value of our reporting units and indefinite-lived intangible assets involves significant assumptions and estimates. Assumptions include those used assess future effects of COVID-19 as well as the realization of synergies anticipated from the Merger which may not be realized at the projected rate. As a result of declines in recent performance and the expected impact on future cash flows as a result of COVID-19, we recognized impairment charges in our Regional segment related to goodwill and trade names totaling $100 million and $16 million, respectively, during the year ended December 31, 2020. As a result of the agreement to sell Baton Rouge, an impairment charge totaling $50 million was recorded during the year ended December 31, 2020 due to the carrying value exceeding the estimated net sales proceeds. The impairment charges resulted in a reduction to the carrying amounts of the right-of-use assets, property and equipment, goodwill and other intangibles totaling $1 million, $47 million and $2 million, respectively, recorded in the Regional segment. As a result of the agreement to sell MontBleu, an impairment charge totaling $45 million was recorded during the year ended December 31, 2020 due to the carrying value exceeding the estimated net sales proceeds. The impairment charges resulted in a reduction to the carrying amounts of the right-of-use assets, property and equipment, goodwill and other intangibles totaling $18 million, $23 million and $4 million, respectively, recorded in the Regional segment. We acquired Former Caesars on July, 20, 2020 and allocated the total purchase consideration transferred to the identifiable assets acquired and liabilities assumed based on their respective fair values, including goodwill and indefinite-lived intangible assets, and therefore, the fair value of the Former Caesars reporting units and indefinite-lived intangible assets do not significantly exceed their respective carrying values. As of October 1, 2020, two other reporting units in the Regional Segment with goodwill totaling $208 million had fair values that did not significantly exceed their respective carrying values. To the extent gaming volumes deteriorate in the near future, discount rates increase significantly, or we do not meet our projected performance, we may recognize further impairments, and such impairments could be material. See Note 7 for additional information. 56 Allowance for Doubtful Accounts - Gaming We reserve an estimated amount for gaming receivables that may not be collected to reduce the Company’s receivables to their net carrying amount. Methodologies for estimating the allowance for doubtful accounts range from specific reserves to various percentages applied to aged receivables. Historical collection rates are considered, as are customer relationships, in determining specific reserves. As with many estimates, management must make judgments about potential actions by third parties in establishing and evaluating our reserves for allowance for doubtful accounts. As of December 31, 2020, a 5% increase or decrease to the allowance determined based on a percentage of aged receivables would change the reserve by approximately $14 million. Self-Insurance Reserves We are self-insured for various levels of general liability, employee medical insurance coverage and workers’ compensation coverage. Insurance claims and reserves include accruals of estimated settlements for known claims, as well as accruals of estimates for claims incurred but not yet reported. We utilize independent consultants to assist management in its determination of estimated insurance liabilities. While the total cost of claims incurred depends on future developments, in managements’ opinion, recorded reserves are adequate to cover future claims payments. Self-insurance reserves for employee medical claims and workers’ compensations are included in accrued payroll and related on the consolidated balance sheets. Self-insurance reserves for general liability claims are included in accrued other liabilities on the Consolidated Balance Sheets. Due to the novel nature of the disruption resulting from the COVID-19 public health emergency, actuarial data is limited for determining its effect. The assumptions utilized by our actuaries are subject to significant uncertainty and if outcomes differ from these assumptions or events develop or progress in a negative manner, the Company could experience a material adverse effect and additional liabilities may be recorded in the future. Alternatively, as a result of the current work stoppages, a reduction of claims in future periods could be beneficial to our financial condition and results of operations. Litigation, Claims and Assessments We utilize estimates for litigation, claims and assessments. These estimates are based on our knowledge and experience regarding current and past events, as well as assumptions about future events. If our assessment of such a matter should change, we may have to change the estimates, which may have an adverse effect on our financial position, results of operations or cash flows. Actual results could differ from these estimates. Recently Issued Accounting Pronouncements For information with respect to recent accounting pronouncements and the impact of these pronouncements on our consolidated financial statements, see Note 2, Summary of Significant Accounting Policies – Recently Issued Accounting Pronouncements , in the notes to the consolidated financial statements. Item 7A. 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. Our exposure to foreign exchange risk is primarily attributable to funds held in operating and escrow accounts which are denominated in British Pounds (GBP). Interest Rate Risk As of December 31, 2020, the face value of our long-term debt was $15.0 billion, including variable-rate long-term borrowings of $6.4 billion. No amounts were outstanding under our revolving credit facilities. As a result of the Merger, we assumed Former Caesars’ interest rate swaps, of which seven interest rate swap agreements are currently in place to fix the interest rate on $2.3 billion of variable rate debt. As a result, net of these interest rate swaps, $4.1 billion of debt remains subject to variable interest rates, as of December 31, 2020, for the term of the agreements. See Note 12 for additional information. 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 as settlements occur. 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. We do not purchase or hold any derivative financial instruments for trading purposes. 57 The table below provides information as of December 31, 2020 about our financial instruments that are sensitive to changes in interest rates including the cash flows associated with amortization, the notional amounts of interest rate derivative instruments, and related weighted average interest rates. Principal amounts are used to calculate the payments to be exchanged under the related agreements and weighted average variable rates are based on implied forward rates in the yield curve as of December 31, 2020 and should not be considered a predictor of actual future interest rates. Expected Maturity Date (Dollars in millions) 2021 2022 2023 2024 2025 Thereafter Total Fair Value Liabilities Long-term debt Fixed rate $ 2 $ 2 $ 2 $ 317 $ 6,502 $ 1,843 $ 8,668 $ 9,179 Average interest rate 6.4 % 6.4 % 6.4 % 6.5 % 8.4 % 8.1 % 7.1 % Variable rate $ 65 $ 65 $ 65 $ 4,436 $ 1,724 $ — $ 6,355 $ 6,287 Average interest rate 3.6 % 3.6 % 3.8 % 6.4 % 6.6 % — % 4.1 % Interest Rate Derivatives Interest rate swaps Variable to fixed (a) $ 1,050 $ 1,250 $ — $ — $ — $ — $ 2,300 Average pay rate 2.7 % 2.7 % — % — % — % — % 2.7 % Average receive rate 1.3 % 1.8 % — % — % — % — % 1.5 % ____________________ (a) These amounts represent the interest rate swap notional amounts that mature at the end of each respective year. See Note 12 for additional information. As of December 31, 2020, borrowings outstanding under our credit facilities were variable-rate borrowings. Assuming a 100 basis-point increase in LIBOR, our annual interest cost would change by $41 million based on gross amounts outstanding at December 31, 2020. LIBOR is expected to be discontinued after 2021. The interest rate per annum applicable to loans under our credit facilities are, at our option, either LIBOR plus a margin or a base rate plus a margin. The credit facilities permit the administrative agent to select, in its reasonable discretion, an alternative base rate in the event that LIBOR is discontinued, but there can be no assurances as to what alternative base rates may be and whether such base rate will be more or less favorable than LIBOR and any other unforeseen impacts of the potential discontinuation of LIBOR. We intend to continue monitoring the developments with respect to the potential phasing out of LIBOR after 2021 and work with our lenders to ensure any transition away from LIBOR will have minimal impact on our financial condition, but can provide no assurances regarding the impact of the discontinuation of LIBOR. Foreign Exchange Rate Risks The Company entered into a foreign exchange forward contract to hedge the risk of appreciation of the GBP denominated purchase price related to William Hill. On October 9, 2020, the Company entered into a foreign exchange forward contract to purchase £536 million at a contracted exchange rate. As of December 31, 2020, the forward contract was valued at $40 million and was recorded in Other long-term assets. A corresponding unrealized gain of $40 million related to the change in fair value was recorded in the Other (loss) income in the Statement of Operations . As of December 31, 2020 , we held approximately $2.5 billion of cash, cash equivalents and restricted cash denominated in GBP. Although these funds are subject to changes in foreign exchange rates, such risk is expected to be mitigated as we anticipate using these funds for the purchase price of William Hill, which is also denominated in GBP. Item 8. Financial Statements and Supplementary Data. Our consolidated financial statements and notes to consolidated financial statements, including the reports of Deloitte & Touche LLP and Ernst & Young LLP thereon, are included at pages 71 through 132 of this Annual Report on Form 10-K. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None. Item 9A. Controls and Procedures. 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, 58 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 management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. 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), evaluated the effectiveness of our disclosure controls and procedures (as defined under the Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Form 10-K Annual Report and as required by Rules 13a-15(b) and 15d-15(b) promulgated under the Exchange Act. 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 Form 10-K Annual Report 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. Management’s Annual Report on Internal Control over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(e) or 15d-15(e) promulgated under the Exchange Act) for Caesars Entertainment, Inc. and its subsidiaries. This system is designed to provide reasonable assurance to the Company’s management regarding the reliability of financial reporting and preparation of consolidated financial statements for external purposes. Management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated and assessed the effectiveness of our internal control over financial reporting as of the end of the period covered by this Form 10-K Annual Report based upon the framework set forth in the Internal Control-Integrated Framework issued in 2013 by the Committee of Sponsoring Organization of the Treadway Commission. Based on this evaluation and assessment, management believes that, as of December 31, 2020, our internal control over financial reporting was effective based on those criteria. The Company completed its acquisition of Caesars Entertainment Corporation and changed its name to Caesars Entertainment, Inc. on July 20, 2020. Accordingly, the acquired assets and liabilities of Caesars Entertainment Corporation are included in our consolidated balance sheet as of December 31, 2020 and the results of its operations and cash flows are reported in our consolidated statement of operations and cash flows for the year ended December 31, 2020 from the date of acquisition. We are currently in the process of integrating policies, processes, information technology systems and other components of internal controls over financial reporting of the combined business. Management will continue to evaluate our internal control over financial reporting as we complete our integration. In accordance with SEC staff guidance permitting a company to exclude an acquired business from management’s assessment of the effectiveness of internal control over financial reporting for the year in which the acquisition is completed, management has excluded Caesars Entertainment Corporation from its internal control assessment. Caesars Entertainment Corporation represents 34% of Caesars Entertainment, Inc.’s consolidated assets as of December 31, 2020, and 59% of Caesars Entertainment, Inc’s net revenue for the year ended December 31, 2020. Deloitte & Touche LLP, an independent registered public accounting firm, has audited our internal control over financial reporting as of December 31, 2020, as stated in its report which follows below. Changes in Internal Control Over Financial Reporting Except as noted below, during the quarter ended December 31, 2020, there were no significant changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. On July 20, 2020, we completed the acquisition of Caesars Entertainment Corporation. See Part IV, Item 15, Notes to Consolidated Financial Statements, Note 3. Acquisitions, Purchase Price Accounting and Pro forma Information, for a discussion of the acquisition and related financial data. The Company is in the process of integrating Caesars Entertainment Corporation 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 acquisition, there were no changes in our internal control over financial reporting that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting. 59 Report of Independent Registered Public Accounting Firm To the stockholders and the Board of Directors of Caesars Entertainment, Inc.: Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of Caesars Entertainment, Inc. and subsidiaries (the “Company”) as of December 31, 2020, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements as of and for the year ended December 31, 2020, of the Company and our report dated February 26, 2021, expressed an unqualified opinion on those financial statements. As described in Management’s Annual Report on Internal Control over Financial Reporting, management excluded from its assessment the internal control over financial reporting at Caesars Entertainment Corporation, which was acquired on July 20, 2020, and whose financial statements constitute 34% of total assets and 59% of revenues of the consolidated financial statement amounts as of and for the year ended December 31, 2020. Accordingly, our audit did not include the internal control over financial reporting at Caesars Entertainment Corporation. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ DELOITTE & TOUCHE LLP Las Vegas, Nevada February 26, 2021 60 Item 9B. Other Information. Not applicable. 61 PART III Item 10. Directors, Executive Officers and Corporate Governance. The information required by this Item is hereby incorporated by reference to our definitive Proxy Statement for our Annual Meeting of Stockholders (our “Proxy Statement”) to be filed with the Securities and Exchange Commission no later than April 30, 2021, pursuant to Regulation 14A under the Securities Act. We have adopted a code of ethics and business conduct applicable to all directors and employees, including the Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer. The code of business conduct and ethics is posted on our website, http://www.caesars.com/corporate (accessible through the “Governance” caption of the Investors page) and a printed copy will be delivered on request by writing to the Corporate Secretary at Caesars Entertainment, Inc., c/o Corporate Secretary, 100 West Liberty Street, 12th Floor, Reno, NV 89501. We intend to satisfy the disclosure requirement regarding certain amendments to, or waivers from, provisions of its code of business conduct and ethics by posting such information on our website. Item 11. Executive Compensation. The information required by this Item is hereby incorporated by reference to our Proxy Statement, to be filed with the Securities and Exchange Commission no later than April 30, 2021, pursuant to Regulation 14A under the Securities Act. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The information required by this Item is hereby incorporated by reference to our Proxy Statement, to be filed with the Securities and Exchange Commission no later than April 30, 2021, pursuant to Regulation 14A under the Securities Act. Item 13. Certain Relationships and Related Transactions, and Director Independence. The information required by this Item is hereby incorporated by reference to our Proxy Statement, to be filed with the Securities and Exchange Commission no later than April 30, 2021, pursuant to Regulation 14A under the Securities Act. Item 14. Principal Accounting Fees and Services. The information required by this Item is hereby incorporated by reference to our Proxy Statement, to be filed with the Securities and Exchange Commission no later than April 30, 2021, pursuant to Regulation 14A under the Securities Act. 62 PART IV Item 15. Financial Statement Schedules. (a)(i) Financial Statements Included in Part II (Item 8) of this Annual Report on Form 10-K: Report s of Independent Registered Public Accounting Firm s Consolidated Balance Sheets as of December 31, 2020 and 2019 Consolidated Statements of Operations for the Years Ended December 31, 2020, 2019 and 2018 Consolidated Statements of Comprehensive (Loss) Income for the Years Ended December 31, 2020, 2019 and 2018 Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2020, 2019 and 2018 Consolidated Statements of Cash Flows for the Years Ended December 31, 2020, 2019 and 2018 Notes to Consolidated Financial Statements (a)(ii) Financial Statement Schedule Schedule I—Condensed Financial Information of Registrant Parent Company Only as of December 31, 2020 and 2019 and for the Years Ended December 31, 2020, 2019, and 2018 We have omitted schedules other than the ones listed above because they are not required or are not applicable, or the required information is shown in the financial statements or notes to the financial statements. (a)(iii) Exhibits 63 Exhibit Number Description of Exhibit Method of Filing 2.1 Agreement and Plan of Merger, dated as of June 24, 2019, by and among Caesars Entertainment Corporation, Eldorado Resorts, Inc. and Colt Merger Sub, Inc. Previously filed on Form 8-K filed on June 25, 2019. 2.2 Amendment No. 1 to Agreement and Plan of Merger, dated as of August 15, 2019, by and among Caesars Entertainment Corporation, Eldorado Resorts, Inc. and Colt Merger Sub, Inc. Previously filed on Form 8-K filed on August 16, 2019. 2.3 Agreement and Plan of Merger by and among Eldorado Resorts, Inc., Delta Merger Sub, Inc., GLP Capital, L.P. and Tropicana Entertainment Inc., dated as of April 15, 2018. Previously filed on Form 8-K filed on April 16, 2018. 3.1 Certificate of Incorporation of Caesars Entertainment, Inc. Previously filed on Form 8-K filed on July 21, 2020. 3.2 Bylaws of Caesars Entertainment, Inc. Previously filed on Form 8-K filed on July 21, 2020. 4.1 Description of Capital Stock Filed herewith. 4.2 Indenture (6.25% CEI Senior Secured Notes due 2025) dated as of July 6, 2020, by and between Colt Merger Sub, Inc. and U.S. Bank National Association. Previously filed on Form 8-K filed on July 7, 2020. 4.3 Supplemental Indenture, dated as of July 20, 2020, to Indenture (6.25% CEI Senior Secured Notes due 2025), dated as of July 6, 2020, by and among Colt Merger Sub, Inc., Eldorado Resorts, Inc., the subsidiary guarantors party thereto and U.S. Bank National Association. Previously filed on Form 8-K filed on July 21, 2020. 4.4 Indenture (8.125% CEI Senior Notes due 2027) dated as of July 6, 2020, by and between Colt Merger Sub, Inc. and U.S. Bank National Association. Previously filed on Form 8-K filed on July 7, 2020. 4.5 Supplemental Indenture, dated as of July 20, 2020, to Indenture (8.125% CEI Senior Notes due 2027), dated as of July 6, 2020, by and among Colt Merger Sub, Inc., Eldorado Resorts, Inc., the subsidiary guarantors party thereto and U.S. Bank National Association. Previously filed on Form 8-K filed on July 21, 2020. 4.6 Indenture (5.75% CRC Secured Notes due 2025) dated as of July 6, 2020, by and between Colt Merger Sub, Inc. and U.S. Bank National Association. Previously filed on Form 8-K filed on July 7, 2020. 4.7 Supplemental Indenture, dated as of July 20, 2020, to Indenture (5.75% CRC Secured Notes due 2025), dated as of July 6, 2020, by and among Colt Merger Sub, Inc., CRC Finco, Inc., Caesars Resort Collection, LLC, the subsidiary guarantors party thereto, U.S. Bank National Association and Credit Suisse AG, Cayman Islands Branch. Previously filed on Form 8-K filed on July 21, 2020. 4.8 Indenture (5.00% CEC Convertible Notes due 2024), dated as of October 6, 2017, between Caesars Entertainment Corporation and Delaware Trust Company, as trustee. Previously filed on Form 8-K filed by Caesars Holdings, Inc. on October 13, 2017. 4.9 First Supplemental Indenture (5.00% CEC Convertible Notes due 2024), dated November 27, 2019 between Caesars Entertainment Corporation and Delaware Trust Company, as trustee. Previously filed on Form 8-K filed by Caesars Holdings, Inc. on November 29, 2019. 4.10 Second Supplemental Indenture (5.00% CEC Convertible Notes due 2024), dated as of July 20, 2020, by and among Caesars Entertainment Corporation, Eldorado Resorts, Inc. and Delaware Trust Company. Previously filed on Form 8-K filed on July 21, 2020. 4.11 Indenture (5.25% CRC Notes due 2025), dated October 16, 2017, by and among CRC Escrow Issuer, LLC, CRC Finco, Inc. and Deutsche Bank Trust Company Americas, as trustee. Previously filed on Form 8-K filed by Caesars Holdings, Inc. on October 16, 2017. 4.12 Supplemental Indenture (5.25% CRC Notes due 2025), dated December 22, 2017, by and among Caesars Resort Collection, LLC, the subsidiary guarantors party thereto, CRC Finco, Inc. and Deutsche Bank Trust Company Americas, as trustee. Previously filed on Form 8-K filed by Caesars Holdings, Inc. on December 22, 2017. 10.1 CPLV Lease (conformed through the Second Amendment), dated as of July 20, 2020, by and among CPLV Property Owner LLC, Desert Palace LLC and CEOC, LLC. Previously filed on Form 8-K filed on July 21, 2020. 10.2 Third Amendment to CPLV Lease, dated as of September 30, 2020, by and among CPLV Property Owner LLC, Desert Palace LLC and CEOC, LLC. Previously filed on Form 10-Q filed on November 9, 2020. 10.3 Fourth Amendment to CPLV Lease, dated as of November 18, 2020, by and among CPLV Property Owner LLC, Desert Palace LLC and CEOC, LLC. Filed herewith. 10.4 Guaranty of Lease, dated as of July 20, 2020, by and among Eldorado Resorts, Inc., CPLV Property Owner LLC and Claudine Propco LLC (CPLV). Previously filed on Form 8-K filed on July 21, 2020. 10.5** Non-CPLV Lease (conformed through the Fifth Amendment), dated as of July 20, 2020, by and among the entities listed on Schedules A and B thereto and CEOC, LLC. Previously filed on Form 8-K filed on July 21, 2020. 10.6** Sixth Amendment to Non-CPLV Lease, dated as of September 30, 2020, by and among the entities listed on Schedules A and B thereto and CEOC, LLC. Previously filed on Form 10-Q filed on November 9, 2020. 64 Exhibit Number Description of Exhibit Method of Filing 10.7 Seventh Amendment to Non-CPLV Lease, dated as of November 18, 2020, by and among the entities listed on Schedules A and B thereto and CEOC, LLC. Filed herewith. 10.8 Guaranty of Lease, dated as of July 20, 2020, by and among Eldorado Resorts, Inc. and the entities listed on Schedule A thereto (Non-CPLV). Previously filed on Form 8-K filed on July 21, 2020. 10.9** Second Amendment, dated as of July 20, 2020, to Lease (Joliet), dated as of October 7, 2017, by and between Harrah’s Joliet Landco LLC and Des Plaines Development Limited Partnership. Previously filed on Form 8-K filed on July 21, 2020. 10.10** Third Amendment to Lease (Joliet), dated as of September 30, 2020, to Lease (Joliet), dated as of October 7, 2017, by and between Harrah’s Joliet Landco LLC and Des Plaines Development Limited Partnership. Previously filed on Form 10-Q filed on November 9, 2020. 10.11 Fourth Amendment to Lease (Joliet), dated as of November 18, 2020, to Lease (Joliet), dated as of October 7, 2017, by and between Harrah’s Joliet Landco LLC and Des Plaines Development Limited Partnership. Filed herewith. 10.12 Guaranty of Lease, dated as of July 20, 2020, by and between Eldorado Resorts, Inc. and Harrah’s Joliet Landco LLC (Joliet). Previously filed on Form 8-K filed on July 21, 2020. 10.13* Right of First Refusal Agreement, dated as of July 20, 2020, by and between Eldorado Resorts, Inc. and VICI Properties L.P. (Las Vegas Strip). Previously filed on Form 8-K filed on July 21, 2020. 10.14 Right of First Refusal Agreement, dated as of July 20, 2020, by and between Eldorado Resorts, Inc. and VICI Properties L.P. (Horseshoe Baltimore). Previously filed on Form 8-K filed on July 21, 2020. 10.15 Second Amendment, dated as of July 20, 2020, to Golf Course Use Agreement, dated as of October 6, 2017, by and among Rio Secco LLC, Cascata LLC, Chariot Run LLC, Grand Bear LLC, Caesars Enterprise Services, LLC, CEOC, LLC and, solely for purposes of Section 2.1(c) thereof, Caesars License Company, LLC. Previously filed on Form 8-K filed on July 21, 2020. 10.16* Amended and Restated Put-Call Right Agreement, dated as of July 20, 2020, by and among Claudine Propco, LLC and Eastside Convention Center, LLC. Previously filed on Form 8-K filed on July 21, 2020. 10.17* Second Amended and Restated Put-Call Right Agreement entered into as of September 18, 2020 by and among Claudine Propco LLC and Caesars Convention Center Owner, LLC. Previously filed on Form 8-K filed on September 18, 2020. 10.18* Put-Call Right Agreement entered into as of July 20, 2020 by and between Centaur Propco LLC and Caesars Resort Collection, LLC. Previously filed on Form 8-K filed on July 21, 2020. 10.19 First Amendment to Third Amended and Restated Omnibus License and Enterprise Services Agreement, dated as of July 20, 2020, by and among Caesars Enterprise Services, LLC, CEOC, LLC, Caesars Resort Collection LLC, Caesars License Company, LLC and Caesars World LLC (including as Exhibit A thereto a conformed copy of the Third Amended and Restated Omnibus License and Enterprise Services Agreement, dated as of December 26, 2018, as amended). Previously filed on Form 8-K filed by Caesars Holdings, Inc. on July 21, 2020. 10.20 Credit Agreement, dated as of July 20, 2020, by and among Eldorado Resorts, Inc., the lenders party thereto from time to time, JPMorgan Chase Bank, N.A., as administrative agent, and U.S. Bank National Association, as collateral agent. Previously filed on Form 8-K filed on July 21, 2020. 10.21 Incremental Assumption Agreement No. 1, dated as of July 20, 2020, by and among Eldorado Resorts, Inc., the subsidiary guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent. Previously filed on Form 8-K filed on July 21, 2020. 10.22 Credit Agreement, dated as of December 22, 2017, by and among Caesars Resort Collection, LLC, the other borrowers from time to time party thereto, the lenders party thereto, and Credit Suisse, AG, Cayman Islands Branch, as administrative agent. Previously filed on Form 8-K filed by Caesars Holdings, Inc. on December 22, 2017. 10.23 First Amendment to Credit Agreement, dated as of June 15, 2020, by and among Caesars Resort Collection, LLC, the subsidiary loan parties party thereto, the lenders party thereto and Credit Suisse AG, Cayman Islands Branch, as administrative agent. Previously filed on Form 8-K filed by Caesars Holdings, Inc. on June 12, 2020. 10.24 Incremental Assumption Agreement No. 1, dated as of July 20, 2020, by and among Caesars Resort Collection, LLC, the subsidiary guarantors party thereto, the lenders party thereto and Credit Suisse AG, Cayman Islands Branch, as administrative agent. Previously filed on Form 8-K filed on July 21, 2020. 10.25 Incremental Assumption Agreement No. 2, dated as of July 20, 2020, by and among Caesars Resort Collection, LLC, the subsidiary guarantors party thereto, the lender party thereto and Credit Suisse AG, Cayman Islands Branch, as administrative agent. Previously filed on Form 8-K filed on July 21, 2020. 10.26 Caesars Entertainment Corporation Amended and Restated Escrow Agreement, dated as of December 12, 2016, between Caesars Entertainment Corporation and Wells Fargo Bank, N.A. Previously filed on Form 8-K filed by Caesars Holdings, Inc. on October 13, 2017. 10.27† Amendment and Restatement of Harrah’s Entertainment, Inc. Executive Deferred Compensation Plan, effective August 3, 2007. Previously filed on Form 10-Q filed by Caesars Holdings, Inc. on August 9, 2007. 65 Exhibit Number Description of Exhibit Method of Filing 10.28† Amendment and Restatement of Park Place Entertainment Corporation Executive Deferred Compensation Plan, effective as of August 3, 2007. Previously filed on Form 10-Q filed by Caesars Holdings, Inc. on August 9, 2007. 10.29† Amendment and Restatement of Harrah’s Entertainment, Inc. Executive Supplemental Savings Plan, effective as of August 3, 2007. Previously filed on Form 10-Q filed by Caesars Holdings, Inc. on August 9, 2007. 10.30† Amendment and Restatement of Harrah’s Entertainment, Inc. Executive Supplemental Savings Plan II, effective as of August 3, 2007. Previously filed on Form 10-Q filed by Caesars Holdings, Inc. on August 9, 2007. 10.31† First Amendment to the Amendment and Restatement of Harrah’s Entertainment, Inc. Executive Supplemental Savings Plan II, effective as of February 9, 2009. Previously filed on Form 8-K filed by Caesars Holdings, Inc. on February 13, 2009. 10.32† Second Amendment to the Amendment and Restatement of the Caesars Entertainment Corporation Executive Supplemental Savings Plan II (fka Harrah’s Entertainment, Inc. Executive Supplemental Savings Plan II), effective as of November 5, 2014. Previously filed on Form 10-K filed by Caesars Holdings, Inc. on March 16, 2015. 10.33† Caesars Entertainment Corporation Second Amended and Restated Executive Deferred Compensation Trust Agreement, dated as of December 12, 2016, between Caesars Entertainment Corporation and Wells Fargo Bank, N.A. Previously filed on Form 8-K filed by Caesars Holdings, Inc. on October 13, 2017. 10.34 Trademark License Agreement, dated as of October 6, 2017, between Caesars License Company, LLC and Desert Palace LLC. Previously filed on Form 8-K filed by Caesars Holdings, Inc. on October 13, 2017. 10.35 Amended and Restated Casino Operating Contract, dated April 1, 2020, by and between Jazz Casino Company, L.L.C. and the State of Louisiana, by and through the Louisiana Gaming Control Board. Previously filed on Form 8-K filed by Caesars Holdings, Inc. on April 6, 2020. 10.36 First Amendment to the Amended and Restated Casino Operating Contract, made and entered into as of April 9, 2020, and made effective as of April 1, 2020, by and between Jazz Casino Company, L.L.C. and the State of Louisiana, by and through the Louisiana Gaming Control Board. Previously filed on Form 8-K/A filed by Caesars Holdings, Inc. on April 14, 2020. 10.37† Caesars Entertainment Corporation 2012 Performance Incentive Plan. Previously filed on Form S-1/A filed by Caesars Holdings, Inc. on February 2, 2012. 10.38† Amendment No. 1 to the Caesars Entertainment Corporation 2012 Performance Incentive Plan. Previously filed on Form 8-K filed by Caesars Holdings, Inc. on July 25, 2012. 10.39† Amendment No. 2 to the Caesars Entertainment Corporation 2012 Performance Incentive Plan. Previously filed on Form 8-K filed by Caesars Holdings, Inc. on May 20, 2015. 10.40† Amendment No. 3 to the Caesars Entertainment Corporation 2012 Performance Incentive Plan. Previously filed on Form 8-K filed by Caesars Holdings, Inc. on May 20, 2016. 10.41† Amendment No. 4 to the Caesars Entertainment Corporation 2012 Performance Incentive Plan. Previously filed on Form 10-Q filed by Caesars Holdings, Inc. on August 2, 2016. 10.42† 2010 Long-Term Incentive Plan. Previously filed on Form 10-Q filed by MTR Gaming Group, Inc. on August 9, 2010. 10.43† Isle of Capri Casinos, Inc. Second Amended and Restated 2009 Long-Term Stock Incentive Plan. Previously filed on Form 8-K filed by Isle of Capri Casinos, Inc. on October 9, 2015. 10.44† Isle of Capri Casino, Inc. Form of Non-Qualified Stock Option Agreement. Previously filed on Form 10-K filed by Isle of Capri Casinos, Inc. on June 17, 2015. 10.45† Caesars Entertainment Corporation 2017 Performance Incentive Plan. Previously filed on Form S-8 filed by Caesars Holdings, Inc. on October 6, 2017. 66 Exhibit Number Description of Exhibit Method of Filing 10.46† Amendment No. 1 to Caesars Entertainment Corporation 2017 Performance Incentive Plan. Previously filed on Form 8-K filed by Caesars Holdings, Inc. on April 6, 2018. 10.47† Caesars Entertainment Corporation Executive Supplemental Savings Plan III. Previously filed on Form S-8 filed by Caesars Holdings, Inc. on December 13, 2018. 10.48† Caesars Entertainment Corporation Outside Director Deferred Compensation Plan. Previously filed on Form S-8 filed by Caesars Holdings, Inc. on December 13, 2018. 10.49† Caesars Acquisition Company 2014 Performance Incentive Plan. Previously filed on Form 8-K filed by Caesars Acquisition Company on April 16, 2014. 10.50† Eldorado Resorts, Inc. Amended and Restated 2015 Equity Incentive Plan Previously filed on Form S-8 POS filed on June 29, 2019. 10.51† Form of Director Indemnification Agreement. Previously filed on Form 10-Q filed on November 9, 2020. 10.52† Form of Director Non-Deferred Restricted Stock Unit Award Agreement pursuant to the Eldorado Resorts, Inc. 2015 Equity Incentive Previously filed on Form 10-K filed on February 28, 2020. 10.53† Form of Restricted Stock Unit Award Agreement pursuant to the Amended & Restated 2015 Equity Incentive Plan. Filed herewith. 10.54† Form of Restricted Stock Unit Award Agreement Performance-Based (TSR) pursuant to the Amended & Restated 2015 Equity Incentive Plan. Filed herewith. 10.55† Form of Restricted Stock Unit Time-Based Award Agreement pursuant to the Eldorado Resorts, Inc. 2015 Equity Incentive Plan. Previously filed on Form 10-K filed on February 28, 2020. 10.56† Form of Director Restricted Stock Unit Award Agreement pursuant to the Eldorado Resorts, Inc. 2015 Equity Incentive Plan. Previously filed on Registration Statement Form S-1 filed by Eldorado Resorts, Inc. June 14, 2015. 10.57† Form of Performance Stock Unit Award Agreement pursuant to the Eldorado Resorts, Inc. 2015 Equity Incentive Plan. Previously filed on Form 10-K filed on March 1, 2019. 10.58 Registration Rights Agreement, dated as of May 1, 2017, by and among Eldorado Resorts, Inc., Recreational Enterprises, Inc., GFIL Holdings, LLC and certain of its affiliates. Previously filed on Form 8-K filed on May 1, 2017. 10.59† Executive Employment Agreement, dated as of February 1, 2019, by and between Eldorado Resorts, Inc. and Bret Yunker . Previously filed on Form 8-K on February 5, 2019. 10.60† Amended and Restated Executive Employment Agreement, dated as of January 17, 2018, by and between Eldorado Resorts, Inc. and Gary Carano Previously filed on Form 8-K on January 22, 2019. 10.61† Amendment No. 1 to Amended and Restated Employment Agreement, dated September 28, 2018, by and between Gary Carano and Eldorado Resorts, Inc. Previously filed on Form 8-K on October 1, 2018. 10.62† Amended and Restated Executive Employment Agreement, dated as of January 17, 2018, by and between Eldorado Resorts, Inc. and Thomas Reeg Previously filed on Form 8-K filed on January 22, 2018. 10.63† Amendment No. 1 to Amended and Restated Employment Agreement, dated September 28, 2018, by and between Thomas Reeg and Eldorado Resorts, Inc. Previously filed on Form 8-K filed on October 1, 2018. 10.64† Amended and Restated Executive Employment Agreement, dated as of January 17, 2018, by and between Eldorado Resorts, Inc. and Anthony Carano Previously filed on Form 8-K filed on January 22, 2018. 10.65† Amendment No. 1 to Amended and Restated Employment Agreement, dated September 28, 2018, by and between Anthony Carano and Eldorado Resorts, Inc. Previously filed on Form 8-K filed on October 1, 2018. 10.66† Amended and Restated Executive Employment Agreement, dated as of January 17, 2018, by and between Eldorado Resorts, Inc. and Edmund L. Quatmann, Jr. Previously filed on Form 10-K filed on February 27, 2018. 10.67 Amended and Restated Omnibus Amendment to Leases, dated as of October 27, 2020, by and among the entities listed on schedule A thereto, CPLV Property Owner LLC, Claudine Propco LLC, Harrah’s Joliet Landco LLC, CEOC, LLC, the entities listed on schedule B thereto, Desert Palace LLC, Harrah’s Las Vegas, LLC and Des Plaines Development Limited Partnership. Previously filed on Form 10-Q filed on November 9, 2020. 67 Exhibit Number Description of Exhibit Method of Filing 10.68 Amended and Restated Master Lease, dated as of June 15, 2020, by and between Tropicana Entertainment, Inc. and GLP Capital L.P. Previously filed on Form 8- K filed on June 15, 2020. 10.69 w UK Interim Facilities Agreement dates as of October 6, 2020, by and among a subsidiary of Caesars Entertainment, Inc.. Deutsche Bank AG. London Branch and JPMorgan Chase Bank, N.A., as arrangers. Previously filed on Form 8-K on October 8, 2020. 14 Code of Ethics and Business Conduct Filed herewith. 21 Subsidiaries of the Registrant Filed herewith. 23.1 Consent of Deloitte & Touche LLP Filed herewith. 23.2 C onsent of Ernst & Young LLP 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 Gaming and Regulatory Overview Filed herewith. 99.2 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. * Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. ** Portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K because such information is (i) not material and (ii) could be competitively harmful if publicly disclosed. w Annexes, schedules and/or exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. 68 SIGNATURES Pursuant to the requirements of Sections 13 or 15(d) of the Securities 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. By: /s/ Thomas R. Reeg Dated: February 26, 2021 Thomas R. Reeg Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Thomas R. Reeg Chief Executive Officer (Principal Executive Officer) and Director February 26, 2021 Thomas R. Reeg /s/ Bret Yunker Chief Financial Officer (Principal Financial Officer) February 26, 2021 Bret Yunker /s/ Stephanie D. Lepori Chief Administrative and Accounting Officer (Principal Accounting Officer) February 26, 2021 Stephanie D. Lepori /s/ Gary L. Carano Executive Chairman of the Board February 26, 2021 Gary L. Carano /s/ Bonnie Biumi Director February 26, 2021 Bonnie Biumi /s/ Jan Jones Blackhurst Director February 26, 2021 Jan Jones Blackhurst /s/ Frank J. Fahrenkopf Jr. Director February 26, 2021 Frank J. Fahrenkopf Jr. /s/ Don Kornstein Director February 26, 2021 Don Kornstein /s/ Courtney Mather Director February 26, 2021 Courtney Mather /s/ Michael E. Pegram Director February 26, 2021 Michael E. Pegram /s/ David P. Tomick Director February 26, 2021 David P. Tomick 69 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS OF CAESARS ENTERTAINMENT, INC. Page Reports of Independent Registered Public Accounting Firms 71 Consolidated Balance Sheets 75 Consolidated Statements of Operations 76 Consolidated Statements of Comprehensive (Loss) Income 77 Consolidated Statement s of Stockholders’ Equity 78 Consolidated Statements of Cash Flows 79 Notes to Consolidated Financial Statements 81 70 Report of Independent Registered Public Accounting Firm To the stockholders and the Board of Directors of Caesars Entertainment, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheet of Caesars Entertainment, Inc. and subsidiaries (the “Company”) as of December 31, 2020, the related consolidated statement of operations, comprehensive (loss) income, stockholders’ equity, and cash flow for the year ended December 31, 2020, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and its cash flow for the year ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 26, 2021, expressed an unqualified opinion on the Company’s internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate. Merger with Caesars Entertainment Corporation – Refer to Note 3 to the Financial Statements Critical Audit Matter Description On July 20, 2020, the Company completed the acquisition of Caesars Entertainment Corporation (“Former Caesars”) for total purchase consideration of $10.9 billion. The Company accounted for the acquisition under the acquisition method of accounting for business combinations. Accordingly, the total purchase consideration transferred was allocated to the identifiable assets acquired and liabilities assumed based on their respective fair values, which included $3.4 billion of intangible assets and $8.9 billion of goodwill that was assigned to the Former Caesars reporting units. The Company used various income approaches to determine the fair value of the acquired intangible assets and reporting units that were assigned goodwill. These income approaches required management to make significant assumptions and estimates around expected cash flows and projected financial results related to revenues and EBITDA giving effect to expected changes in operating results in future years (collectively the “forecasts”) as well as the selection of discount rates. The forecasts and selection of discount rates included assumptions and estimates around the impact of the COVID-19 public health emergency (“COVID-19”) and the realization of significant identified synergies. Changes in these assumptions and estimates could have a significant impact on the fair value of the intangible assets and reporting units that were assigned goodwill. Therefore, auditing 71 the forecasts and the selection of discount rates involved a higher degree of auditor judgment and subjectivity as well as an increased level of audit effort, including the involvement of valuation specialists. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the forecasts and the selection of discount rates used by management to determine the fair value of the acquired intangible assets and the reporting units that were assigned goodwill included the following: • We tested the effectiveness of the Company’s internal controls over the forecasts and the selection of discount rates. • We evaluated management’s ability to accurately forecast by comparing actual results to management’s historical forecasts. • We evaluated the assumptions and estimates included in the forecasts by: 1) comparing the forecasts to information included in the Company’s communications to the Board of Directors, earnings and press releases, gaming industry reports, investor presentations, and analyst reports for the Company and certain of its peer companies; 2) comparing estimated competitive impacts with historical competitive impacts experienced; 3) assessing the impact of COVID-19 relative to published economic, governmental, and gaming and travel industry expectations; and 4) conducting inquiries with property management. • We evaluated management’s ability to accurately estimate the identified synergies by comparing the estimated synergies to actual synergies realized in historical acquisitions completed by the Company. • With the assistance of our valuation specialists, we evaluated the discount rates selected by management, including assessing the impact of the uncertainty in the forecasts, testing the market-based source information underlying the selection of the discount rates and the mathematical accuracy of the discount rate calculations, and developing a range of independent estimates and comparing those to the discount rates selected by management. Goodwill and Intangible Assets – Refer to Note 7 to the Financial Statements Critical Audit Matter Description The Company’s goodwill and indefinite-lived intangible assets balances were $9.7 billion and $3.8 billion, respectively, as of December 31, 2020. The Company performed its annual goodwill and indefinite-lived intangible asset impairment analysis as of October 1, 2020. The Company acquired Former Caesars on July, 20, 2020 and allocated the total purchase consideration transferred to the identifiable assets acquired and liabilities assumed based on their respective fair values, including goodwill and indefinite-lived intangible assets, and therefore, the fair value of the Former Caesars reporting units and indefinite-lived intangible assets do not significantly exceed their respective carrying values. As of October 1, 2020 two of the Company’s other reporting units in the Regional Segment with goodwill totaling $208 million had fair values that did not significantly exceed their respective carrying values. Additionally, for the year ended December 31, 2020 the Company recorded $100 million of goodwill impairments related to five other reporting units in the Regional Segment and $22 million of indefinite-lived intangible asset impairments related to tradenames. The Company’s evaluation of goodwill and indefinite-lived intangible assets for impairment involves the comparison of the fair value of each reporting unit and indefinite-lived intangible asset to its respective carrying value. The Company determines the fair value of its reporting units based on a combination of EBITDA, valuation multiples, and estimated future cash flows discounted at rates commensurate with the capital structure and cost of capital of comparable market participants, giving appropriate consideration to the prevailing borrowing rates within the casino industry in general. The Company determines the fair value of its indefinite-lived intangible assets using either the relief from royalty method or the excess earnings method under the income approach. The determination of fair value of its reporting units and indefinite-lived intangible assets requires management to make significant assumptions and estimates around the forecasts as well as the selection of discount rates and valuation multiples. Changes in these estimates could have a significant impact on the fair value of the Company’s reporting units and intangible assets and the amount of goodwill or indefinite-lived intangible asset impairments, if any. The forecasts and the selection of discount rates and valuation multiples used to determine the fair value of the Company’s reporting units and indefinite-lived intangible assets involved significant assumptions and estimates around the impact of COVID-19 and the realization of significant identified synergies. Therefore, auditing the forecasts and the selection of discount 72 rates and valuation multiples involved a higher degree of auditor judgment and subjectivity as well as an increased level of audit effort, including the involvement of valuation specialists. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the forecasts and the selection of discount rates and valuation multiples used by management to determine the fair value of the Company’s reporting units and indefinite-lived intangible assets included the following: • We tested the effectiveness of the Company’s internal controls over the forecasts and the selection of discount rates and valuation multiples. • We evaluated management’s ability to accurately forecast by comparing actual results to management’s historical forecasts. • We evaluated the assumptions and estimates included in management’s forecasts by: 1) evaluating the impact of qualitative and quantitative factors to the impairment conclusions for the Former Caesars reporting units and indefinite-lived intangible assets subsequent to the acquisition date; 2) comparing the forecasts to information included in the Company’s communications to the Board of Directors, earnings and press releases, gaming industry reports, investor presentations, and analyst reports for the Company and certain of its peer companies; 3) comparing estimated competitive impacts with historical competitive impacts experienced; 4) assessing the impact of COVID-19 relative to published economic, governmental, and gaming and travel industry expectations; and 5) conducting inquiries with property management. • We evaluated management’s ability to accurately estimate the identified synergies by comparing the estimated synergies to actual synergies realized in historical acquisitions completed by the Company. • With the assistance of our valuation specialists, we evaluated the discount rates and valuation multiples selected by management, including assessing the impact of the uncertainty in the forecasts on the discount rates and valuation multiples, testing the market-based source information underlying the selection of both the discount rates and valuation multiples and the mathematical accuracy of the discount rate and valuation multiple calculations, and developing a range of independent estimates and comparing those to the discount rates and valuation multiples selected by management. /s/ DELOITTE & TOUCHE LLP Las Vegas, Nevada February 26, 2021 We have served as the Company’s auditor since 2020. 73 Report of Independent Registered Public Accounting Firm The Board of Directors and Stockholders Caesars Entertainment, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheet of Caesars Entertainment, Inc., (formerly Eldorado Resorts Inc.) (the Company) as of December 31, 2019, the related consolidated statements of operations, comprehensive (loss) income, stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2019, and the related notes and the financial statement schedule listed in the Index at Item 15 (a)(ii) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2019, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2019, in conformity with U.S. generally accepted accounting principles. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Ernst & Young LLP We served as the Company’s auditor from 2011 to 2020. Las Vegas, Nevada February 27, 2020 74 CAESARS ENTERTAINMENT, INC. CONSOLIDATED BALANCE SHEETS (Dollars in millions) December 31, 2020 December 31, 2019 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 1,758 $ 206 Restricted cash and investments 2,021 4 Accounts receivable, net 338 54 Due from affiliates 44 4 Inventories 44 18 Prepayments and other current assets 250 66 Assets held for sale ($ 130 and $ 0 attributable to our VIEs) 2,212 253 Total current assets 6,667 605 Investments in and advances to unconsolidated affiliates 173 136 Property and equipment, net 14,333 2,615 Gaming licenses and other intangibles, net 4,253 1,111 Goodwill 9,723 910 Other assets, net 1,236 264 Total assets $ 36,385 $ 5,641 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Current portion of long-term debt $ 67 $ 246 Accounts payable 165 62 Accrued interest 229 36 Accrued other liabilities 1,239 307 Liabilities related to assets held for sale ($ 130 and $ 0 attributable to our VIEs) 885 37 Total current liabilities 2,585 688 Long-term financing obligation 12,295 971 Long-term debt, less current portion 14,073 2,325 Deferred income taxes 1,166 197 Other long-term liabilities 1,232 343 Total liabilities 31,351 4,524 Commitments and contingencies (Note 11) STOCKHOLDERS' EQUITY: Common stock, 300,000,000 shares authorized, 208,049,417 and 77,569,117 issued and outstanding, net of treasury shares, par value $ 0.00001 as of December 31, 2020 and December 31, 2019, respectively — — Paid-in capital 6,382 760 (Accumulated deficit) Retained earnings ( 1,391 ) 366 Treasury stock at cost, 223,823 shares held at December 31, 2020 and 2019 ( 9 ) ( 9 ) Accumulated other comprehensive income 34 — Caesars stockholders' equity 5,016 1,117 Noncontrolling interests 18 — Total stockholders’ equity 5,034 1,117 Total liabilities and stockholders’ equity $ 36,385 $ 5,641 The accompanying notes are an integral part of these consolidated financial statements. 75 CAESARS ENTERTAINMENT, INC. CONSOLIDATED STATEMENTS OF OPERATIONS Years Ended December 31, (In millions, except per share data) 2020 2019 2018 REVENUES: Casino and pari-mutuel commissions $ 2,337 $ 1,808 $ 1,553 Food and beverage 337 301 247 Hotel 450 300 184 Other 350 119 72 Net revenues 3,474 2,528 2,056 EXPENSES: Casino and pari-mutuel commissions 1,197 905 824 Food and beverage 261 239 203 Hotel 170 99 65 Other 140 46 39 General and administrative 882 503 381 Corporate 195 66 46 Impairment charges 215 1 14 Depreciation and amortization 583 222 157 Transaction costs and other operating costs 268 37 17 Total operating expenses 3,911 2,118 1,746 Operating (loss) income ( 437 ) 410 310 OTHER EXPENSE: Interest expense, net ( 1,174 ) ( 286 ) ( 172 ) Loss on extinguishment of debt ( 197 ) ( 8 ) — Other (loss) income 176 9 ( 3 ) Total other expense ( 1,195 ) ( 285 ) ( 175 ) (Loss) income from continuing operations before income taxes ( 1,632 ) 125 135 Provision for income taxes ( 126 ) ( 44 ) ( 40 ) Net (loss) income from continuing operations, net of income taxes ( 1,758 ) 81 95 Discontinued operations, net of income taxes — — — Net (loss) income ( 1,758 ) 81 95 Net loss attributable to noncontrolling interests 1 — — Net (loss) income attributable to Caesars $ ( 1,757 ) $ 81 $ 95 Net (loss) income per share - basic and diluted: Basic (loss) income per share $ ( 13.50 ) $ 1.04 $ 1.23 Diluted (loss) income per share $ ( 13.50 ) $ 1.03 $ 1.22 Weighted average basic shares outstanding 130 78 77 Weighted average diluted shares outstanding 130 79 78 The accompanying notes are an integral part of these consolidated financial statements. 76 CAESARS ENTERTAINMENT, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME Years Ended December 31, (In millions) 2020 2019 2018 Net (loss) income $ ( 1,758 ) $ 81 $ 95 Foreign currency translation adjustments 9 — — Change in fair market value of interest rate swaps, net of tax 26 — — Other comprehensive income, net of tax 35 — — Comprehensive (loss) income ( 1,723 ) 81 95 Amounts attributable to noncontrolling interests: Net loss (income) attributable to noncontrolling interests 1 — — Foreign currency translation adjustments ( 1 ) — — Comprehensive loss (income) attributable to noncontrolling interests — — — Comprehensive (loss) income attributable to Caesars $ ( 1,723 ) $ 81 $ 95 The accompanying notes are an integral part of these consolidated financial statements. 77 CAESARS ENTERTAINMENT, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Caesars Stockholders' Equity Common Stock Treasury Stock (In millions) Shares Amount Paid-in Capital Retained Earnings (Accumulated Deficit) Accumulated Other Comprehensive Income Amount Noncontrolling interests Total Stockholders' Equity Balance, January 1, 2018 76 $ — $ 747 $ 195 $ — $ — $ — $ 942 Issuance of restricted stock units 1 — 13 — — — — 13 Purchase of treasury shares — — — — — ( 9 ) — ( 9 ) Net income — — — 95 — — — 95 Shares withheld related to net share settlement of stock awards — — ( 12 ) — — — — ( 12 ) Balance, December 31, 2018 77 — 748 290 — ( 9 ) — 1,029 Cumulative change in accounting principle, net of tax — — — ( 5 ) — — — ( 5 ) Issuance of restricted stock units 1 — 20 — — — — 20 Net income — — — 81 — — — 81 Shares withheld related to net share settlement of stock awards — — ( 8 ) — — — — ( 8 ) Balance, December 31, 2019 78 — 760 366 — ( 9 ) — 1,117 Issuance of restricted stock units 1 — 72 — — — — 72 Issuance of common stock, net 67 — 3,172 — — — — 3,172 Net loss — — — ( 1,757 ) — — ( 1 ) ( 1,758 ) Shares issued to Former Caesars shareholders 62 — 2,381 — — — — 2,381 Former Caesars replacement awards — — 24 — — — — 24 Other comprehensive income, net of tax — — — — 34 — 1 35 Shares withheld related to net share settlement of stock awards — — ( 16 ) — — — — ( 16 ) Acquired noncontrolling interests — — ( 18 ) — — — 18 — Other — — 7 — — — — 7 Balance, December 31, 2020 208 $ — $ 6,382 $ ( 1,391 ) $ 34 $ ( 9 ) $ 18 $ 5,034 The accompanying notes are an integral part of these consolidated financial statements. 78 CAESARS ENTERTAINMENT, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Years Ended December 31, (In millions) 2020 2019 2018 CASH FLOWS FROM OPERATING ACTIVITIES: Net (loss) income $ ( 1,758 ) $ 81 $ 95 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 583 222 157 Amortization of deferred financing costs, discount and debt premium 156 18 8 Provision for doubtful accounts 29 1 2 Deferred revenue ( 11 ) ( 7 ) — Loss on extinguishment of debt 197 8 — Non-cash lease amortization 14 3 1 Unrealized (gain) loss on restricted investment ( 34 ) ( 9 ) 3 Stock compensation expense 78 20 13 Loss (gain) on sale of businesses and disposal of property and equipment ( 7 ) ( 50 ) 1 Impairment charges 215 1 14 (Benefit) provision for deferred income taxes 176 ( 2 ) 34 Change in fair value of derivative ( 9 ) — — Foreign currency transaction gain ( 129 ) — — Other non-cash adjustments to net (loss) income ( 1 ) 3 ( 1 ) Change in operating assets and liabilities: Accounts receivable ( 70 ) 5 6 Prepaid expenses and other assets 6 10 — Income taxes (receivable) payable ( 40 ) ( 22 ) 7 Accounts payable, accrued expenses and other liabilities 27 31 ( 17 ) Other ( 4 ) — — Net cash (used in) provided by operating activities ( 582 ) 313 323 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment, net ( 163 ) ( 171 ) ( 147 ) Former Caesars acquisition, net of cash acquired ( 6,394 ) — — Acquisition of gaming rights ( 35 ) — — Purchase of restricted investments — — ( 8 ) Proceeds from sale of businesses, property and equipment, net of cash sold 366 536 1 Proceeds from the sale of investments 25 5 — Net cash used in business combinations — — ( 1,113 ) Proceeds from insurance related to property damage 17 — — Investments in unconsolidated affiliates ( 1 ) ( 1 ) ( 1 ) Other 6 — — Net cash (used in) provided by investing activities ( 6,179 ) 369 ( 1,268 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from long-term debt and revolving credit facilities 9,765 33 1,161 Repayments of long-term debt and revolving credit facilities ( 3,742 ) ( 736 ) ( 70 ) Proceeds from sale-leaseback financing arrangement 3,224 — — Financing obligation payments ( 49 ) — — Debt issuance and extinguishment costs ( 356 ) ( 1 ) ( 26 ) Proceeds from issuance of common stock 2,718 — — Cash paid to settle convertible notes ( 903 ) — — Taxes paid related to net share settlement of equity awards ( 16 ) ( 8 ) ( 12 ) Purchase of treasury stock — — ( 9 ) Net cash (used in) provided by financing activities 10,641 ( 712 ) 1,044 79 Years Ended December 31, (In millions) 2020 2019 2018 CASH FLOWS FROM DISCONTINUED OPERATIONS: Cash flows from operating activities 11 — — Cash flows from investing activities ( 6 ) — — Net cash from discontinued operations 5 — — Change in cash, cash equivalents, and restricted cash classified as assets held for sale ( 15 ) — — Effect of foreign currency exchange rates on cash 129 — — Increase (decrease) in cash, cash equivalents and restricted cash 3,999 ( 30 ) 99 Cash, cash equivalents and restricted cash, beginning of period 217 247 148 Cash, cash equivalents and restricted cash, end of period $ 4,216 $ 217 $ 247 RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO AMOUNTS REPORTED WITHIN THE CONSOLIDATED BALANCE SHEETS: Cash and cash equivalents $ 1,758 $ 206 $ 231 Restricted cash 2,021 4 9 Restricted and escrow cash included in other noncurrent assets 437 7 7 Total cash, cash equivalents and restricted cash $ 4,216 $ 217 $ 247 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Interest paid $ 892 $ 277 $ 166 Income taxes (refunded) paid, net ( 7 ) 51 ( 4 ) NON-CASH INVESTING AND FINANCING ACTIVITIES: Payables for capital expenditures 40 11 12 Exchange for sale-leaseback financing obligation 246 — — Shares issued to settle convertible notes 454 — — Shares issued to Former Caesars shareholders 2,381 — — The accompanying notes are an integral part of these consolidated financial statements. 80 CAESARS ENTERTAINMENT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The accompanying consolidated financial statements include the accounts of Caesars Entertainment, Inc., a Delaware corporation formerly known as Eldorado Resorts, Inc. (“ERI” or “Eldorado”), and its consolidated subsidiaries which may be referred to as the “Company,” “CEI,” “Caesars,” “we,” “our,” or “us” within these financial statements. We also refer to (i) our Consolidated Financial Statements as our “Financial Statements,” (ii) our Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income (Loss) as our “Statements of Operations,” (iii) our Consolidated Balance Sheets as our “Balance Sheets,” and (iv) our Consolidated Statements of Cash Flows as our “Statements of Cash Flows.” References to numbered “Notes” refer to Notes to our Consolidated Financial Statements included herein. Note 1 . Organization and Basis of Presentation Organization The Company is a geographically diversified gaming and hospitality company that was founded in 1973 by the Carano family with the opening of the Eldorado Hotel Casino in Reno, Nevada. The Company partnered with MGM Resorts International to build Silver Legacy Resort Casino (“Silver Legacy”) in Reno, Nevada in 1993 and, beginning in 2005, grew through a series of acquisitions, including the acquisition of Eldorado Resort Casino Shreveport (“Eldorado Shreveport”) in 2005, MTR Gaming Group, Inc. in 2014, Circus Circus Reno and the 50 % membership interest in the Silver Legacy that was owned by MGM Resorts International in 2015, Isle of Capri Casinos, Inc. (“Isle” or “Isle of Capri”) in 2017 and Grand Victoria Casino (“Elgin”) and Tropicana Entertainment, Inc. (“Tropicana”) in 2018. On July 20, 2020, the Company completed the merger with Caesars Entertainment Corporation (“Former Caesars”) pursuant to which Former Caesars became a wholly-owned subsidiary of the Company (the “Merger”). As a result of the Merger, the Company currently owns, leases or manages an aggregate of 54 domestic properties in 16 states with approximately 54,600 slot machines, video lottery terminals (“VLTs”) and e-tables, approximately 3,200 table games and approximately 47,700 hotel rooms as of December 31, 2020. We also have international operations in five countries outside of the U.S. In addition, we have other domestic and international properties that are authorized to use the brands and marks of Caesars Entertainment, Inc., as well as other non-gaming properties. Upon completion of our previously announced sales, or expected sales of certain gaming properties, we expect to continue to own, lease or manage 48 properties. See Note 19. The Company’s primary source of revenue is generated by gaming operations, and the Company utilizes its hotels, restaurants, bars, entertainment, racing, sportsbook offerings, retail shops and other services to attract customers to its properties. In connection with the Merger, Caesars Entertainment Corporation changed its name to “Caesars Holdings, Inc.” and Eldorado Resorts, Inc. converted into a Delaware corporation and changed its name to “Caesars Entertainment, Inc.” In addition, effective as of July 21, 2020 the Company’s ticker symbol on the NASDAQ Stock Market changed from “ERI” to “CZR”. In connection with the Merger, the Company also entered into a Master Transaction Agreement (the “MTA”) with VICI Properties L.P., a Delaware limited partnership (“VICI”), pursuant to which, among other things, the Company agreed to consummate certain sale and leaseback transactions and amend certain lease agreements with VICI and/or its affiliates, with respect to certain property described in the MTA. See Note 3 for further discussion of the Merger and related transactions. On January 11, 2019 and March 8, 2019, respectively, the Company completed its sales of Presque Isle Downs & Casino (“Presque”) and Lady Luck Casino Nemacolin (“Nemacolin”), which are both located in Pennsylvania. On December 6, 2019, the Company completed its sales of Mountaineer Casino, Racetrack and Resort (“Mountaineer”), Isle Casino Cape Girardeau (“Cape Girardeau”) and Lady Luck Casino Caruthersville (“Caruthersville”). Mountaineer is located in West Virginia and Cape Girardeau and Caruthersville are located in Missouri. On July 1, 2020, the Company completed the sales of Isle of Capri Casino Kansas City (“Kansas City”) and Lady Luck Casino Vicksburg (“Vicksburg”). On September 30, 2020, the Company completed the sale of Harrah’s Reno. On April 24, 2020, the Company entered into a definitive purchase agreement with Twin River Worldwide Holdings, Inc. (“Twin River” or subsequently, “Bally’s Corporation”) and certain of its affiliates for the sale of the equity interests of Eldorado Resort Casino Shreveport Joint Venture and Columbia Properties Tahoe, LLC, the entities that hold Eldorado Resort Casino Shreveport (“Eldorado Shreveport”) and MontBleu Casino Resort & Spa (“MontBleu”), for aggregate consideration of $ 155 million, subject to a customary working capital adjustment. The definitive agreement provides that the consummation of the sale is subject to satisfaction of customary conditions, including receipt of required regulatory approvals. The sale of Eldorado Shreveport closed on December 23, 2020 for $ 140 million, subject to a customary working capital adjustment, and the sale of MontBleu is expected to close in the first half of 2021. 81 CAESARS ENTERTAINMENT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) On September 3, 2020, the Company and VICI entered into an agreement to sell Harrah’s Louisiana Downs Casino, Racing & Entertainment (“Harrah’s Louisiana Downs”) to Rubico Acquisition Corp. for $ 22 million, subject to a customary working capital adjustment, which proceeds will be split between the Company and VICI. The sale is subject to satisfaction of customary conditions, including receipt of required regulatory approvals and is expected to close in the first half of 2021. In connection with its review of the Merger, the Indiana Gaming Commission determined on July 16, 2020 that, as a condition to their approval of the Merger, the Company is required to enter into agreements to divest of three properties within the state of Indiana in order to avoid undue economic concentration. As discussed below, the Company has entered into agreements to sell Tropicana Evansville (“Evansville”) and Caesars Southern Indiana. The Company plans to enter into an agreement to divest Horseshoe Hammond prior to December 31, 2021, as the deadline was extended by the Indiana Gaming Commission. On October 27, 2020, the Company entered into an agreement to sell Evansville to GLPI and Twin River for $ 480 million in cash, subject to a customary working capital adjustment. The sale is subject to satisfaction of customary conditions, including receipt of required regulatory approvals and is expected to close in mid-2021. Also on October 27, 2020, in conjunction with the execution of the agreement to sell Evansville, the Company’s subsidiaries, Isle Casino Bettendorf and Isle Casino Hotel Waterloo (collectively, the “Exchanging Subsidiaries”), entered into an Exchange Agreement with GLPI pursuant to which the Exchanging Subsidiaries agreed to transfer the real estate relating to the Isle Casino Bettendorf and Isle Casino Hotel Waterloo to GLPI in exchange for the real estate relating to Evansville. The exchange transaction closed on December 18, 2020 and as a result of the lease being classified as a financing obligation the exchange was accounted for as a debt modification. As a result of the exchange, the real estate relating to Evansville was removed from the master lease with GLPI that we entered into in connection with the acquisition of Tropicana (the “GLPI Master Lease”) and the real estate relating to Isle Casino Bettendorf and Isle Casino Hotel Waterloo is now subject to the GLPI Master Lease. On November 18, 2020, the sale of Bally's Atlantic City to Bally’s Corporation was completed for $ 25 million, of which, we received 25 % and VICI received 75 %. In addition, on October 9, 2020, we reached an agreement to sell the Bally’s brand to Bally’s Corporation for $ 20 million, while retaining the right to use the brand within Bally’s Las Vegas into perpetuity. Caesars agreed to reimburse Bally’s Corporation $ 30 million for capital expenditures required at Bally’s Atlantic City and recorded a liability within Accrued other liabilities and recorded a charge to Discontinued operations, net of income taxes. Our commitment will be satisfied by adjusting obligations under certain sportsbook operating agreements between Bally’s Corporation and the Company following our expected acquisition of William Hill. On December 1, 2020, the Company entered into an agreement to sell the Belle of Baton Rouge (“Baton Rouge”) to CQ Holding Company, Inc. Pursuant to the terms of the GLPI Master Lease, Baton Rouge will be removed from the GLPI Master Lease, and the rent payments to GLPI will remain unchanged. GLPI will retain ownership of the real estate of Baton Rouge. The transaction is expected to close in mid-2021 and is subject to regulatory approvals and other customary closing conditions. On December 24, 2020, the Company entered into agreement to sell Caesars Southern Indiana to Eastern Band of Cherokee Indians (“EBCI”) for $ 250 million, subject to a customary working capital adjustment. Caesar’s annual payments to VICI under the Regional Lease (as defined below) will decline by $ 33 million upon closing of the transaction. Additionally, effective as of the closing of the transaction, Caesars and EBCI will enter into a long-term agreement for the continued use of the Caesars brand and Caesars Rewards loyalty program at Caesars Southern Indiana. The sale is subject to satisfaction of customary conditions, including receipt of required regulatory approvals and is expected to close in the third quarter of 2021. Former Caesars properties, including Harrah’s Louisiana Downs, Caesars Southern Indiana, Horseshoe Hammond, Harrah’s Reno, Caesars UK group, including Emerald Resort & Casino, and Bally’s Atlantic City, have met held for sale criteria as of the date of the closing of the Merger. The sales of these properties have or are expected to close within one year from the date of the closing of the Merger and the properties are classified as discontinued operations. Proposed Acquisition of William Hill The Company has entered into agreements, which became effective January 29, 2019, with William Hill plc and William Hill U.S. Holdco, Inc. (“William Hill US”), its U.S. subsidiary (together, “William Hill”) which granted to William Hill the right to conduct betting activities, including operating certain of our sportsbooks, in retail channels under certain skins (described below) for online channels with respect to the Company’s current and future properties, and conduct certain real money online gaming activities. The Company received a 20 % ownership interest in William Hill US as well as 13 million ordinary shares of William Hill plc, which carry certain time restrictions on when they can be sold. See Note 5 related to the investments in William Hill. Additionally, the Company receives a profit share from the operations of sports betting and other gaming activities associated with the Company’s properties. 82 CAESARS ENTERTAINMENT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) On September 30, 2020, the Company announced that it had reached an agreement with William Hill plc on the terms of a recommended cash acquisition pursuant to which the Company would acquire the entire issued and to be issued share capital (other than shares owned by the Company or held in treasury) of William Hill plc, in an all-cash transaction of approximately £ 2.9 billion, or $ 3.7 billion . To provide liquidity to fund the cash purchase price for the proposed acquisition, the Company entered into various financing transactions. On September 25, 2020, the Company borrowed $ 900 million under the CEI Revolving Credit Facility (defined below), which was fully repaid in October 2020. See Note 12. O n October 1, 2020, the Company raised approximately $ 1.9 billion through a public offering of Company Common Stock, which was deposited into an escrow account. As of December 31, 2020, these funds in escrow were classified as restricted cash and will remain restricted until the proposed acquisition of William Hill plc closes. See Note 15. In order to manage the risk of appreciation of the GBP denominated purchase price the Company has entered into a foreign exchange forward contract. See Note 8 . In connection with the proposed acquisition of William Hill plc, on September 29, 2020, the Company entered into a debt financing commitment letter pursuant to which the lenders party thereto have committed to arrange and provide a newly formed subsidiary of the Company with (a) a £ 1.0 billion senior secured 540-day bridge loan facility, (b) a £ 116 million senior secured 540-day revolving credit facility and (c) a £ 503 million senior secured 60-day bridge loan facility (collectively, the “Debt Financing”). The proceeds of the Debt Financing will be used (i) to pay a portion of the cash consideration for the proposed acquisition, (ii) to refinance certain of William Hill plc's and its subsidiaries' existing debt, (iii) to pay fees and expenses related to the acquisition and related transactions and (iv) for working capital and general corporate purposes. Pending negotiation of the loan agreement for the Debt Financing, on October 6, 2020, a newly formed subsidiary of the Company entered into a £ 1.5 billion interim facilities agreement (the “Interim Facilities Agreement”) with Deutsche Bank AG, London Branch and JPMorgan Chase Bank, N.A. to provide: (a) a 90-day £ 1.0 billion interim asset sale bridge facility and (b) a 90-day £ 503 million interim cash confirmation bridge facility, which agreement will be terminated upon the execution of the loan agreement for the Debt Financing. The transaction is conditioned on, among other things, the approval of William Hill plc shareholders, which was received on November 19, 2020, and receipt of required regulatory approvals. On December 28, 2020, we obtained the early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”) relating to the proposed combination with William Hill plc. A final UK court hearing is scheduled for the last week of March 2021 and we expect to close the acquisition shortly thereafter. Basis of Presentation Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), which requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses and the disclosure of contingent assets and liabilities. Management believes the accounting estimates are appropriate and reasonably determined. Actual amounts could differ from those estimates. The executive decision maker of the Company reviews operating results, assesses performance and makes decisions on a “significant market” basis. Management views each of the Company’s casinos as an operating segment. Operating segments are aggregated based on their similar economic characteristics, types of customers, types of services and products provided, and their management and reporting structure. Prior to the Merger, our principal operating activities occurred in five geographic regions and reportable segments: West, Midwest, South, East and Central, in addition to Corporate and Other. Following the Merger, the Company’s principal operating activities occur in three regionally-focused 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, and (3) Managed, International, CIE, in addition to Corporate and Other. See Note 19 for a listing of properties included in each segment. The presentation of financial information herein for the period after the Company’s acquisition of Former Caesars on July 20, 2020 is not fully comparable to the periods prior to the acquisition. In addition, the presentation of financial information herein for the periods after the Company’s sales of various properties are not fully comparable to the periods prior to their respective sale dates. See Note 4 for details. Consolidation of Subsidiaries and Variable Interest Entities Our consolidated financial statements include the accounts of Caesars and its subsidiaries after elimination of all intercompany accounts and transactions. All significant intercompany transactions have been eliminated in consolidation. We consolidate all subsidiaries in which we have a controlling financial interest and VIEs for which we or one of our consolidated subsidiaries is the primary beneficiary. Control generally equates to ownership percentage, whereby (i) affiliates 83 CAESARS ENTERTAINMENT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) that are more than 50% owned are consolidated; (ii) investments in affiliates of 50% or less but greater than 20% are generally accounted for using the equity method where we have determined that we have significant influence over the entities; and (iii) investments in affiliates of 20% or less are generally accounted for as investments in equity securities. We consider ourselves the primary beneficiary of a VIE when we have both the power to direct the activities that most significantly affect the results of the VIE and the right to receive benefits or the obligation to absorb losses of the entity that could be potentially significant to the VIE. We review our investments for VIE consideration if a reconsideration event occurs to determine if the investment continues to qualify as a VIE. If we determine an investment no longer qualifies as a VIE, there may be a material effect to our financial statements. Consolidation of Korea Joint Venture The Company has a joint venture to acquire, develop, own, and operate a casino resort project in Incheon, South Korea (the “Korea JV”). We determined that the Korea JV is a VIE and the Company is the primary beneficiary, and therefore, we consolidate the Korea JV into our financial statements. As of December 31, 2020, the assets and liabilities of the Korea JV were classified as held for sale. The sale subsequently closed on January 21, 2021. See Note 4. Recent Developments Related to COVID-19 In January 2020, an outbreak of a new strain of coronavirus (“COVID-19”) was identified and has since spread throughout much of the world, including the United States. All of the Company’s casino properties were temporarily closed for the period from mid-March 2020 through mid-May 2020 due to orders issued by various government agencies and tribal bodies as part of certain precautionary measures intended to help slow the spread of the COVID-19 public health emergency. On May 15, 2020, the Company began reopening properties and has resumed certain operations at substantially all of our properties as of December 31, 2020, with the exception of additional temporary closures of Caesars Windsor, Harrah’s Philadelphia, and our properties in Illinois. Subsequently, Harrah’s Philadelphia and our properties in Illinois have reopened. The COVID-19 public health emergency has had a material adverse effect on the Company’s business, financial condition and results of operations for the year ended December 31, 2020. The Company continued to pay its full-time employees through April 10, 2020, including tips and tokens. Effective April 11, 2020, the Company furloughed approximately 90 % of its employees, implemented salary reductions and committed to continue to provide benefits to its employees during the duration of their respective furlough period. A portion of the Company’s workforce has returned to service as the properties have resumed with limited capacities and in compliance with operating restrictions imposed by governmental or tribal orders, directives, and guidelines. Due to a triggering event resulting from the COVID-19 public health emergency, the Company recognized impairment charges related to goodwill and trade names during the year ended December 31, 2020. See Note 7 for details. Due to the impact of the ongoing COVID-19 public health emergency on the Company’s results of operations, in June 2020 the Company obtained waivers on the financial covenants in its Former Caesars credit facility agreement and the GLPI Master Lease. In addition, Former Caesars obtained a waiver of the financial covenant in the credit agreement by and among Caesars Resort Collection, LLC and the lenders thereunder (the “CRC Credit Agreement”). Furthermore, the Company obtained waivers from VICI in relation to annual capital expenditure requirements for 2020. See Note 12 for details. The extent of the ongoing and future effects of the COVID-19 public health emergency on the Company’s business and the casino resort industry generally is uncertain, but the Company expects that it will continue to have a significant impact on its business, results of operations and financial condition. The extent and duration of the impact of COVID-19 will ultimately depend on future developments, including but not limited to, the duration and severity of the outbreak, restrictions on operations imposed by governmental authorities, the potential for authorities reimposing stay at home orders or additional restrictions in response to continued developments with the COVID-19 public health emergency, the Company’s ability to adapt to evolving operating procedures, the impact on consumer demand and discretionary spending, the length of time it takes for demand to return, the efficacy and availability of vaccines and the Company’s ability to adjust its cost structures for the duration of the outbreak’s effect on its operations. Note 2. Summary of Significant Accounting Policies Additional significant accounting policy disclosures are provided within the applicable notes to the Financial Statements. Cash and Cash Equivalents. Cash equivalents include investments in money market funds that can be redeemed immediately at the current net asset value per share. A money market fund is a mutual fund whose investments are primarily in short-term debt securities designed to maximize current income with liquidity and capital preservation, usually maintaining per share net asset value at a constant amount, such as one dollar. Cash and cash equivalents also include cash maintained for gaming operations. The carrying amounts approximate the fair value because of the short maturity of those instruments (Level 1). 84 CAESARS ENTERTAINMENT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Restricted Cash and Investments. The significant portion of our restricted cash relates to $ 1.9 billion, which was primarily raised from the proceeds of our sale of common stock to fund a portion of the purchase price for the proposed acquisition of William Hill (See Note 1) . Restricted cash also includes certificates of deposit and cash restricted under certain operating agreements or restricted for future capital expenditures in the normal course of business. Investments consist primarily of debt and equity securities, held by the Company’s captive insurance subsidiaries, which are regularly purchased with the intention to resell in the short term. Restricted investments include shares acquired in conjunction with the Company’s sports betting agreements with William Hill that contain restrictions related to the ability to liquidate shares within a specified timeframe. The trading securities are carried at fair value with changes in fair value recognized in current period income (See Note 8). Advertising. Advertising costs are expensed in the period the advertising initially takes place and are included in marketing and promotions expenses within operating expenses. Advertising costs included in marketing and promotion expenses were $ 64 million, $ 29 million and $ 34 million for the years ended December 31, 2020, 2019 and 2018, respectively. Reclassifications Certain reclassifications of prior year presentations have been made to conform to the current period presentation. Marketing and promotions expense previously disclosed for the years ended December 31, 2019 and 2018 has been reclassified to Casino and pari-mutuel commissions expense and General and administrative expense based on the nature of the expense. Recently Issued Accounting Pronouncements Pronouncements Implemented in 2020 In June 2016 (modified in November 2018), the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, Financial Instruments – Credit Losses related to the timing of recognizing impairment losses on financial assets. The new guidance lowers the threshold on when losses are incurred, from a determination that a loss is probable to a determination that a loss is expected. The guidance is effective for interim and annual periods beginning after December 15, 2019. Adoption of the guidance required a modified-retrospective approach and a cumulative adjustment to retained earnings to the first reporting period that the update is effective. The Company adopted the new guidance on January 1, 2020. Adoption of this guidance did not have a material impact on the Company’s Consolidated Financial Statements. In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract. This amendment aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). This generally means that an intangible asset is recognized for the software license and, to the extent that the payments attributable to the software license are made over time, a liability also is recognized. If a cloud computing arrangement does not include a software license, the entity should account for the arrangement as a service contract. This generally means that the fees associated with the hosting element (service) of the arrangement are expensed as incurred. The amendment was effective for annual and interim periods beginning after December 15, 2019. The Company adopted the new guidance on January 1, 2020. Adoption of this guidance did not have a material impact on the Company’s Consolidated Financial Statements. In August 2018, the FASB issued ASU 2018-13, Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. This amendment modifies the disclosure requirements for fair value measurements and was effective for annual and interim periods beginning after December 15, 2019. The Company adopted the new guidance on January 1, 2020. Adoption of this guidance did not have a material impact on the Company’s Consolidated Financial Statements. In August 2018, the FASB issued ASU 2018-14, Compensation – Retirement Benefits – Defined Benefit Plans – General. This amendment improves disclosures over defined benefit plans and is effective for interim and annual periods ending after December 15, 2020 with early adoption allowed. The Company adopted the new guidance on January 1, 2021, which did not have a material impact on the Company’s Consolidated Financial Statements. In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes. This amendment modifies accounting guidelines for income taxes and is effective for annual and interim periods beginning after December 15, 2020 with early adoption allowed. We adopted the new guidance during the fourth quarter of 2020 on a prospective basis for each topic applicable to the Company, with the exception of amendments related to entities not subject to tax, which was applied retrospectively. The adoption of this ASU did not have a material impact on the Company’s Consolidated Financial Statements. 85 CAESARS ENTERTAINMENT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Pronouncements to Be Implemented in Future Periods In March 2020, the FASB issued ASU 2020-04 (amended through January 2021), Reference Rate Reform. The amendments in this update are intended to provide relief to the companies that have contracts, hedging relationships or other transactions that reference the London Inter-bank Offered Rate (“LIBOR”) or another reference rate which is expected to be discontinued because of reference rate reform on a prospective basis. The amendments provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions if certain criteria are met. The adoption of, and future elections under, ASU 2020-04 are not expected to have a material impact on our Consolidated Financial Statements as the standard will ease, if warranted, the requirements for accounting for the future effects of the rate reform. The amendments in this update are effective as of March 12, 2020 and companies may elect to apply the amendments prospectively through December 31, 2022. The Company has not yet adopted this new guidance as of December 31, 2020 and is evaluating the qualitative and quantitative effect the new guidance will have on its Consolidated Financial Statements. In August 2020, the FASB issued ASU 2020-06, Debt with Conversion and Other Options and Derivatives and Hedging. This update amends guidance on convertible instruments and the guidance on derivative scope exception for contracts in an entity’s own equity. The amendments for convertible instruments reduce the number of accounting models for convertible debt instruments and convertible preferred stock. In addition, the amendments provide guidance on instruments that will continue to be subject to separation models and improves disclosure for convertible instruments and guidance for earnings per share. Furthermore, the update amends guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. The amendments in this update are effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. These amendments should be applied on either a modified retrospective basis or a fully retrospective basis. The Company is currently assessing the effect the adoption of this standard will have on our prospective financial statements. Note 3 . Acquisitions, Purchase Price Accounting and Pro forma Information Merger with Caesars Entertainment Corporation On July 20, 2020, the Merger was consummated and Former Caesars became a wholly-owned subsidiary of the Company. The strategic rationale for the Merger includes, but is not limited to, the following: • Creation of the largest owner, operator and manager of domestic gaming assets • Diversification of the Company’s domestic footprint • Access to iconic brands, rewards programs and new gaming opportunities expected to enhance customer experience • Realization of significant identified synergies The total purchase consideration for Former Caesars was $ 10.9 billion. The estimated purchase consideration in the acquisition was determined with reference to its acquisition date fair value. (In millions) Consideration Cash consideration paid $ 6,090 Shares issued to Former Caesars shareholders 2,381 Cash paid to retire Former Caesars debt 2,356 Other consideration paid 48 Total purchase consideration $ 10,875 Based on the closing price of $ 38.24 per share of the Company’s common stock, par value $ 0.00001 per share (“Company Common Stock”), reported on NASDAQ on July 20, 2020, the aggregate implied value of the aggregate merger consideration paid to former holders of Former Caesars common stock in connection with the Merger was approximately $ 8.5 billion, including approximately $ 2.4 billion in the Company Common Stock and approximately $ 6.1 billion in cash. The aggregate merger consideration transferred also included approximately $ 2.4 billion related to the repayment of certain outstanding debt balances of Former Caesars and approximately $ 48 million of other consideration paid which includes $ 19 million related to a transaction success fee, for the benefit of Former Caesars, and $ 29 million for the replacement of equity awards of certain employees attributable to services provided prior to the Merger. Pursuant to the Merger, each share of Former Caesars common stock was converted into the right to receive, at the election of the holder thereof and subject to proration, approximately $ 12.41 of cash consideration or approximately 0.3085 shares of Company Common Stock, with a value equal to approximately $ 12.41 in cash (based on the volume weighted average price per share of Company Common Stock for the 10 trading days ending on July 16, 2020). Following the consummation of the Merger, stockholders of the Company and stockholders of Former Caesars held approximately 61 % and 39 %, respectively, of the outstanding shares of Company Common Stock. 86 CAESARS ENTERTAINMENT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Preliminary Purchase Price Allocation The fair values are based on management’s analysis including preliminary work performed by third party valuation specialists, which are subject to finalization over the one-year measurement period. The purchase price accounting for Former Caesars is preliminary as it relates to determining the fair value of certain assets and liabilities, including goodwill, and is subject to change. The following table summarizes the preliminary allocation of the purchase consideration to the identifiable assets acquired and liabilities assumed of Former Caesars, with the excess recorded as goodwill as of December 31, 2020: (In millions) Fair Value Current and other assets $ 4,149 Property and equipment 12,691 Goodwill 8,922 Intangible assets (a) 3,364 Other noncurrent assets 676 Total assets $ 29,802 Current liabilities $ 1,836 Financing obligation 8,149 Long-term debt 6,591 Noncurrent liabilities 2,333 Total liabilities 18,909 Noncontrolling interests 18 Net assets acquired $ 10,875 ____________________ (a) Intangible assets consist of gaming licenses valued at $ 388 million, trade names valued at $ 2.1 billion, the Caesars Rewards programs valued at $ 523 million and customer relationships valued at $ 403 million. As noted above, the preliminary purchase price allocation is subject to a measurement period and has since been revised during the fourth quarter ended December 31, 2020, from our initial estimates. The net impact of these changes in our initial valuations was a $ 273 million increase to goodwill. Changes included a $ 115 million decrease to current and other assets, a $ 39 million decrease in property and equipment, a $ 185 million decrease in intangible assets, and an $ 8 million decrease in other noncurrent assets. Additionally, current liabilities were decreased by $ 60 million, the assumed financing obligation was increased by $ 15 million and noncurrent liabilities were decreased by $ 29 million. The effect of these revisions during the fourth quarter did not have a material impact on our Statement of operations. The fair values of the assets acquired and liabilities assumed were determined using the market, income, and cost approaches, or a combination. Valuation methodologies under both a market and income approach used for the identifiable net assets acquired in the Former Caesars acquisition make use of Level 3 inputs, such as expected cash flows and projected financial results. The market approach indicates value for a subject asset based on available market pricing for comparable assets. Trade receivables and payables and other current and noncurrent assets and liabilities were valued at the existing carrying values as they represented the estimated fair value of those items at the Former Caesars acquisition date. Assets and liabilities held for sale are recorded at fair value, less costs to sell, based on the agreements reached as of the acquisition date, or an income approach. Certain financial assets acquired were determined to have experienced more than insignificant deterioration of credit quality since origination. A reconciliation of the difference between the purchase price of financial assets, including acquired markers, and the face value of the assets is as follows: (In millions) Purchase price of financial assets $ 95 Allowance for credit losses at the acquisition date based on the acquirer’s assessment 89 Discount / (premium) attributable to other factors 2 Face value of financial assets $ 186 The fair value of land was determined using the sales comparable approach. The market data is then adjusted for any significant differences, to the extent known, between the identified comparable sites and the site being valued. The value of building and site improvements was estimated via the income approach. Other personal property assets such as furniture, gaming and computer equipment, fixtures, computer software, and restaurant equipment were valued using the cost approach which is based 87 CAESARS ENTERTAINMENT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) on replacement or reproduction costs of the asset. The cost approach is an estimation of fair value developed by computing the current cost of replacing a property and subtracting any depreciation resulting from one or more of the following factors: physical deterioration, functional obsolescence, and/or economic obsolescence. Non-amortizing intangible assets acquired primarily include trademarks, Caesars Rewards and gaming rights. The fair value for these intangible assets was determined using either the relief from royalty method and excess earnings method under the income approach or a replacement cost market approach. Trademarks and Caesars Rewards were valued using the relief from royalty method, which presumes that without ownership of such trademarks or loyalty program, the Company would have to make a stream of payments to a brand or franchise owner in return for the right to use their name or program. By virtue of this asset, the Company avoids any such payments and records the related intangible value of the Company’s ownership of the brand name or program. The acquired Trademarks, including Caesars Rewards are indefinite lived intangible assets. Customer relationships are valued using an income approach, comparing the prospective cash flows with and without the customer relationships in place to estimate the fair value of the customer relationships, with the fair value assumed to be equal to the discounted cash flows of the business that would be lost if the customer relationships were not in place and needed to be replaced. We estimate the useful life of these customer relationships to be approximately seven years . Gaming rights include our gaming licenses in various jurisdictions and may have indefinite lives or an estimated useful life. The fair value of the gaming rights was determined using the excess earnings or replacement cost methodology, based on whether the license resides in gaming jurisdictions where competition is limited to a specified number of licensed gaming operators. The excess earnings methodology is an income approach methodology that estimates the projected cash flows of the business attributable to the gaming license intangible asset, which is net of charges for the use of other identifiable assets of the business including working capital, fixed assets and other intangible assets. The replacement cost of the gaming license was used as an indicator of fair value. The acquired gaming rights have indefinite lives, with the exception of one jurisdiction in which we estimate the useful life of the license to be approximately 34 years. Goodwill is the result of expected synergies from the operations of the combined company and the assembled workforce of Former Caesars. The final assignment of goodwill to reporting units has not been completed. The goodwill acquired will not generate amortization deductions for income tax purposes. The fair value of long-term debt has been calculated based on market quotes. The fair value of the financing obligations were calculated as the net present value of both the fixed base rent payments and the forecasted variable payments plus the expected residual value of the land and building returned at the end of the expected usage period. The Company recognized acquisition-related transaction costs in connection with the merger with Former Caesars of $ 160 million and $ 80 million for the years ended December 31, 2020 and 2019, respectively. These costs were associated with legal, IT costs, internal labor and professional services and were recognized as Transaction costs and other operating costs in our Consolidated Statements of Operations. For the period of July 20, 2020 through December 31, 2020, Former Caesars generated net revenues of $ 2.0 billion and net loss of $ 1.2 billion. Tropicana Acquisition Summary On April 15, 2018, the Company announced that it had entered into a definitive agreement to acquire Tropicana in a cash transaction valued at $ 1.9 billion (the “Tropicana Acquisition”). At the closing of the transaction on October 1, 2018, a subsidiary of the Company merged into Tropicana and Tropicana became a wholly-owned subsidiary of the Company. Immediately prior to the merger, Tropicana sold Tropicana Aruba Resort and Casino and Gaming and Leisure Properties, Inc. (“GLPI”) acquired substantially all of Tropicana’s real estate, other than the real estate underlying MontBleu and Lumière, for approximately $ 964 million. The Company acquired Tropicana’s operations and certain real estate for $ 927 million. Substantially concurrently with the acquisition of the real estate portfolio by GLPI, the Company also entered into a triple net master lease with GLPI (the “Master Lease”) (see Note 10). The Company funded the purchase of the real estate underlying Lumière with the proceeds of a $ 246 million loan and funded the remaining consideration payable with cash on hand at the Company and Tropicana, borrowings under the Company’s revolving credit facility and proceeds from the Company’s offering of $ 600 million in aggregate principal amount of 6 % senior notes due 2026. These instruments were refinanced during 2020 (see Note 12). Transaction expenses related to the Tropicana Acquisition totaled $ 4 million for the year ended December 31, 2019. 88 CAESARS ENTERTAINMENT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Final Purchase Price Accounting The total purchase consideration for the Tropicana Acquisition was $ 927 million. The purchase consideration in the acquisition was determined with reference to its acquisition date fair value. (In millions) Consideration Cash consideration paid $ 640 Lumière Loan 246 Cash paid to retire Tropicana's long-term debt 35 ERI portion of taxes due 6 Purchase consideration $ 927 The fair values are based on management’s analysis including work performed by third party valuation specialists. The following table summarizes the final allocation of the purchase consideration to the identifiable assets acquired and liabilities assumed of Tropicana, with the excess recorded as goodwill as of December 31, 2019: (In millions) Fair Value Current and other assets $ 179 Property and equipment 436 Property subject to the financing obligation 957 Goodwill 211 Intangible assets (a) 248 Other noncurrent assets 55 Total assets $ 2,086 Current liabilities $ 175 Financing obligation to GLPI 957 Noncurrent liabilities 27 Total liabilities 1,159 Net assets acquired $ 927 ____________________ (a) Intangible assets consist of gaming licenses valued at $ 125 million, trade names valued at $ 67 million and customer relationships valued at $ 56 million. As of September 30, 2019, the Company finalized its valuation procedures and adjusted the Tropicana preliminary purchase price accounting to their final values. The net impact of these changes was a $ 9 million decrease to goodwill. Changes included a $ 16 million increase to other noncurrent assets primarily related to certain long-term receivables offset by $ 7 million of other changes to liabilities. Valuation methodologies under both a market and income approach used for the identifiable net assets acquired in the Tropicana Acquisition make use of Level 3 inputs including discounted cash flows. Trade receivables and payables, inventories 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 Tropicana Acquisition date. The fair value of land (excluding the real property acquired by GLPI) was determined using the market approach, which arrives at an indication of value by comparing the site being valued to sites that have been recently acquired in arm’s-length transactions. The market data is then adjusted for any significant differences, to the extent known, between the identified comparable sites and the site being valued. Building and site improvements were valued under the cost approach using a direct cost model built on estimates of replacement cost. Personal property assets with an active and identifiable secondary market such as riverboats, gaming equipment, computer equipment and vehicles were valued using the market approach. Other personal property assets such as furniture, fixtures, computer software, and restaurant equipment were valued using the cost approach which is based on replacement or reproduction costs of the asset. The cost approach is an estimation of fair value developed by computing the current cost of replacing a property and subtracting any depreciation resulting from one or more of the following factors: physical deterioration, functional obsolescence, and/or economic obsolescence. The income approach incorporates all tangible and intangible property and served as a ceiling for the fair values of the acquired assets of the ongoing business enterprise, while still taking into account the premise of highest and best use. In the instance where the business enterprise value developed via the income approach was exceeded by the initial fair values of the underlying assets, an adjustment to reflect economic obsolescence was made to the tangible assets on a pro rata basis to reflect the contributory value of each individual asset to the enterprise as a whole. 89 CAESARS ENTERTAINMENT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) The real estate assets that were sold to GLPI and leased back by the Company were adjusted to fair value concurrently with the acquisition of Tropicana. The fair value of the properties was determined utilizing the direct capitalization method of the income approach. In allocating the fair value to the underlying acquired assets, a fair value for the buildings and improvements was determined using the above mentioned cost approach method. To determine the underlying land value, the extraction method was applied wherein the fair value of the building and improvements was deducted from the fair value of the property as derived from the direct capitalization approach to determine the fair value of the land. The fair value of GLPI’s real estate assets was determined to be $ 957 million. The fair value of the gaming licenses was determined using the multi period excess earnings or replacement cost methodology, based on whether the license resides in gaming jurisdictions where competition is limited to a specified number of licensed gaming operators. The excess earnings methodology is an income approach methodology that estimates the projected cash flows of the business attributable to the gaming license intangible asset, which is net of charges for the use of other identifiable assets of the business including working capital, fixed assets and other intangible assets. Under the respective state’s gaming legislation, the property specific licenses can only be acquired if a theoretical buyer were to acquire each existing facility. The existing licenses could not be acquired and used for a different facility. The properties’ estimated future cash flows were the primary assumption in the respective valuations. Cash flow estimates included net gaming revenue, gaming operating expenses, general and administrative expenses, and tax expense. The replacement cost methodology is a cost approach methodology based on replacement or reproduction cost of the gaming license as an indicator of fair value. The Company has assigned an indefinite useful life to the gaming licenses. The Company considered, among other things, the expected use of the asset, the expected useful life of other related assets or asset groups, any legal, regulatory, or contractual provisions that may limit the useful life, the Company’s own historical experience in renewing similar arrangements, the effects of obsolescence, demand and other economic factors, and the maintenance expenditures required to obtain the expected cash flows. The Company determined that no legal, regulatory, contractual, competitive, economic or other factors limit the useful lives of these intangible assets. Tropicana had licenses in New Jersey, Missouri, Mississippi, Nevada, Indiana, and Louisiana. The renewal of each state’s gaming license depends on a number of factors, including payment of certain fees and taxes, providing certain information to the state’s gaming regulator, and meeting certain inspection requirements. However, the Company’s historical experience has not indicated, nor does the Company expect, any limitations regarding its ability to continue to renew each license. No other competitive, contractual, or economic factor limits the useful lives of these assets. Accordingly, the Company has concluded that the useful lives of these licenses are indefinite. Trade names were valued using the relief from royalty method, which presumes that without ownership of such trademarks, the Company would have to make a stream of payments to a brand or franchise owner in return for the right to use their name. By virtue of this asset, the Company avoids any such payments and records the related intangible value of the Company’s ownership of the brand name. The primary assumptions in the valuation included revenue, pre-tax royalty rate, and tax expense. The Company has assigned an indefinite useful life to the trade names after considering, among other things, the expected use of the asset, the expected useful life of other related assets or asset groups, any legal, regulatory, or contractual provisions that may limit the useful life, the Company’s own historical experience in renewing similar arrangements, the effects of obsolescence, demand and other economic factors, and the maintenance expenditures required to obtain the expected cash flows. In that analysis, the Company determined that no legal, regulatory, contractual, competitive, economic or other factors limit the useful lives of these intangible assets. Customer relationships were valued using the cost approach and the incremental cash flow method under the income approach. The incremental cash flow method is used to estimate the fair value of an intangible asset based on a residual cash flow notion. This method measures the benefits (e.g., cash flows) derived from ownership of an acquired intangible asset as if it were in place, as compared to the acquirer’s expected cash flows as if the intangible asset were not in place (i.e., with-and-without). The residual or net cash flows of the two models is ascribable to the intangible asset. The Company has estimated a 3 -year useful life on the customer relationships. Goodwill is the result of expected synergies from combining operations of the acquired and acquirer. The goodwill acquired is fully amortizable for tax purposes. For the period from the Tropicana acquisition date of October 1, 2018 through December 31, 2018, Tropicana generated net revenues of $ 205 million and net loss of $ 9 million. Elgin Final Purchase Price Accounting On August 7, 2018, the Company completed its acquisition of one hundred percent of the partnership interests in Elgin. As a result of the Elgin Acquisition, Elgin became an indirect wholly-owned subsidiary of the Company. The Company purchased 90 CAESARS ENTERTAINMENT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Elgin for $ 328 million plus a $ 1 million working capital adjustment. The Elgin Acquisition was financed using cash on hand and borrowings under the Company’s revolving credit facility. Transaction expenses related to the Elgin Acquisition totaled less than $ 1 million for the year ended December 31, 2019. The total purchase consideration for the Elgin Acquisition was $ 329 million. The purchase consideration in the acquisition was determined with reference to its acquisition date fair value. (In millions) Consideration Cash consideration paid $ 328 Working capital and other adjustments 1 Purchase consideration $ 329 The fair values are based on management’s analysis including work performed by third party valuation specialists. As of September 30, 2019, the Company finalized its valuation procedures and no changes were recorded to the acquisition date fair values as disclosed in the Annual Report on Form 10-K for the year ended December 31, 2018. The following table summarizes the allocation of the purchase consideration to the identifiable assets acquired and liabilities assumed of Elgin, with the excess recorded as goodwill as of December 31, 2019: (In millions) Consideration Current and other $ 25 Property and equipment 61 Goodwill 60 Intangible assets (a) 206 Other noncurrent assets 1 Total assets $ 353 Current liabilities $ 22 Noncurrent liabilities 2 Total liabilities 24 Net assets acquired $ 329 ____________________ (a) Intangible assets consist of gaming licenses valued at $ 164 million, trade names valued at $ 13 million and customer relationships valued at $ 29 million. Valuation methodologies under both a market and income approach used for the identifiable net assets acquired in the Elgin Acquisition made use of Level 3 inputs including discounted cash flows. Trade receivables and payables, inventories 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 Elgin Acquisition date. The fair value of land was determined using the market approach, which arrives at an indication of value by comparing the site being valued to sites that have been recently acquired in arm’s-length transactions. The market data is then adjusted for any significant differences, to the extent known, between the identified comparable sites and the site being valued. Building and site improvements were valued under the cost approach using a direct cost model built on estimates of replacement cost. Personal property assets with an active and identifiable secondary market such as riverboats, gaming equipment, computer equipment and vehicles were valued using the market approach. Other personal property assets such as furniture, fixtures, computer software, and restaurant equipment were valued using the cost approach which is based on replacement or reproduction costs of the asset. The cost approach is an estimation of fair value developed by computing the current cost of replacing a property and subtracting any depreciation resulting from one or more of the following factors: physical deterioration, functional obsolescence, and/or economic obsolescence. The income approach incorporates all tangible and intangible property and served as a ceiling for the fair values of the acquired assets of the ongoing business enterprise, while still taking into account the premise of highest and best use. The Company has assigned an indefinite useful life to the gaming licenses. The fair value of the gaming license was determined using the multi period excess earnings method. The excess earnings methodology, which is an income approach methodology that allocates the projected cash flows of the business to the gaming license intangible assets less charges for the use of other identifiable assets of Elgin including working capital, fixed assets and other intangible assets. This methodology was considered 91 CAESARS ENTERTAINMENT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) appropriate as the gaming license is the primary asset of Elgin. The property’s estimated future cash flows were the primary assumption in the respective valuations. Cash flow estimates included net gaming revenue, gaming operating expenses, general and administrative expenses, and tax expense. The renewal of the gaming license depends on a number of factors, including payment of certain fees and taxes, providing certain information to the state’s gaming regulator, and meeting certain inspection requirements. However, the Company’s historical experience has not indicated, nor does the Company expect, any limitations regarding its ability to continue to renew the license. No other competitive, contractual, or economic factor limits the useful lives of this asset. Accordingly, the Company has concluded that the useful life of this license is indefinite. Customer relationships were valued using the cost approach and the incremental cash flow method under the income approach. The incremental cash flow method is used to estimate the fair value of an intangible asset based on a residual cash flow notion. This method measures the benefits (e.g., cash flows) derived from ownership of an acquired intangible asset as if it were in place, as compared to the acquirer’s expected cash flows as if the intangible asset were not in place (i.e., with-and-without). The residual or net cash flows of the two models is ascribable to the intangible asset. The Company has estimated a four-year useful life on the customer relationships. The trade name was valued using the relief-from-royalty method. The primary assumptions in the valuation included revenue, pre-tax royalty rate, and tax expense. The Company has assigned the trade name an indefinite useful life after considering, among other things, the expected use of the asset, the expected useful life of other related assets or asset groups, any legal, regulatory, or contractual provisions that may limit the useful life, the Company’s own historical experience in renewing similar arrangements, the effects of obsolescence, demand and other economic factors, and the maintenance expenditures required to obtain the expected cash flows. In that analysis, the Company determined that no legal, regulatory, contractual, competitive, economic or other factors limit the useful lives of these intangible assets. Goodwill is the result of expected synergies from combining operations of the acquired and acquirer. The goodwill acquired is fully amortizable for tax purposes. For the period from the Elgin acquisition date of August 7, 2018 through December 31, 2018, Elgin generated net revenues of $ 63 million and net income of $ 8 million. Unaudited Pro Forma Information Merger with Caesars Entertainment Corporation The following unaudited pro forma financial information is presented to illustrate the estimated effects of the acquisition of Former Caesars as if it had occurred on January 1, 2019. The pro forma amounts include the historical operating results of the Company and Former Caesars prior to the acquisition, with adjustments directly attributable to the acquisition. The pro forma results include adjustments and consequential tax effects to reflect incremental depreciation and amortization expense to be incurred based on preliminary fair values of the identifiable property and equipment and intangible assets acquired, the incremental interest expense associated with the issuance of debt to finance the acquisition and the adjustments to exclude acquisition related costs incurred during the year ended December 31, 2020 and to recognize these costs during the year ended December 31, 2019 as if incurred on January 1, 2019. The unaudited pro forma financial information is not necessarily indicative of what the consolidated results of operations of the combined company were, nor does it reflect the expected realization of any synergies or cost savings associated with the acquisition. Years Ended December 31, (In millions) 2020 2019 Net revenues $ 5,642 $ 10,134 Net loss ( 2,738 ) ( 1,039 ) Net loss attributable to Caesars ( 2,670 ) ( 1,035 ) These pro forma results do not necessarily represent the results of operations that would have been achieved if the Merger had taken place on January 1, 2019, nor are they indicative of the results of operations for future periods. The pro forma amounts include the historical operating results of the Company and Former Caesars prior to the Merger with adjustments directly attributable to the Merger. Tropicana The following