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Item 7. Management’s Discussion and Analysis

2024-02-20 compared with 2023-02-22 · 312 added, 360 removed, 406 unchanged (62% of the section changed)

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Our actual results may differ materially from those contained in or implied by any forward-looking statements.

See Item 1A, “Risk Factors—CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS,” of this report.

See “Cautionary Statement Regarding Forward-Looking Information.”

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.

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in 2014, Isle of Capri Casinos, Inc.

(“Isle” or “Isle of Capri”) in 2017 and Tropicana Entertainment, Inc.

in 2018 and a merger with Caesars Entertainment Corporation (“Former Caesars”) on July 20, 2020, pursuant to which Former Caesars became our wholly-owned subsidiary (the “Merger”) and our ticker symbol on the NASDAQ Stock Market changed from “ERI” to “CZR.” In addition, on April 22, 2021, we completed the acquisition of William Hill PLC (the “William Hill Acquisition”).

in 2017, Tropicana Entertainment, Inc.

in 2018, Caesars Entertainment Corporation in 2020, and William Hill PLC (the “William Hill Acquisition”) on April 22, 2021.

O ur ticker symbol on the NASDAQ Stock Market is “CZR.”

We currently own, lease or manage an aggregate of 52 domestic properties in 18 states with approximately 51,300 slot machines, video lottery terminals and e-tables, approximately 2,700 table games and approximately 44,700 hotel rooms as of December 31, 2023.

In addition, we have other domestic and international properties that are authorized to use the brands and marks of Caesars Entertainment, Inc., as well as other non-gaming properties.

Our primary source of revenue is generated by our casino properties’ gaming operations, including our retail and online sports betting, as well as our online gaming, and we utilize our hotels, restaurants, bars, entertainment, racing, retail shops and other services to attract customers to our properties.

In addition, we have other properties in North America that are authorized to use the brands and marks of Caesars Entertainment, Inc.

Our primary source of revenue is generated by our casino properties’ gaming operations, which includes our retail and online sports betting and online gaming, and we utilize our hotels, restaurants, bars, entertainment, racing, retail shops and other services to attract customers to our properties.

As of December 31, 2023, we owned 22 of our casinos and leased 24 casinos in the U.S.

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(“GLPI”), pursuant to a Master Lease (as amended, the “GLPI Master Lease”) and a Lumière lease (together with the GLPI Master Lease, the “GLPI Leases”).

Additionally, we lease the Rio All-Suite Hotel & Casino from a separate third party.

See descriptions under the “GLPI Leases” and “VICI Leases.”

We also operate and conduct sports wagering across 28 jurisdictions in North America, 20 of which are mobile for sports betting, and operate regulated online real money gaming in six jurisdictions in North America.

Our Caesars Sportsbook app operates on the Liberty platform, which we acquired in the William Hill Acquisition along with other technology platforms that we intend to migrate to the Liberty platform in the future, subject to required approvals.

Additionally, we leased the Rio All-Suite Hotel & Casino (“Rio”) from a separate third party until October 2, 2023, at which time operations were assumed by the lessor.

See descriptions below under the “GLPI Leases” and “VICI Leases.”

We operate and conduct retail and online sports wagering across 31 jurisdictions in North America, 25 of which offer online sports betting.

Additionally, we operate iGaming in five jurisdictions in North America.

The map below illustrates Caesars Digital’s presence as of December 31, 2023:

On January 1, 2023, we launched mobile sports betting on our Liberty platform in Ohio and Caesars Sportsbook is now accepting in-person sports wagers and mobile account cash deposits at certain destinations including Eldorado Gaming Scioto Downs.

In addition to the Caesars Sportsbook app, we partnered with NYRABets LLC, the official online wagering platform of the New York Racing Association, Inc., and launched the Caesars Racebook app within eight states as of December 31, 2022.

The Caesars Racebook app provides access for pari-mutuel wagering at over 300 race tracks around the world as well as livestreaming of races.

In 2022, we partnered with NYRABets LLC, the official online wagering platform of the New York Racing Association, Inc., and have launched the Caesars Racebook app within 20 states as of December 31, 2023.

Caesars Racebook also went live in Illinois in January 2024.

The Caesars Racebook app provides access for pari-mutuel wagering at over 300 racetracks around the world as well as livestreaming of races.

Wagers placed can earn credits towards our Caesars Rewards loyalty program or points which can be redeemed for free wagering credits.

We are also in the process of continuing the expansion of our Caesars Digital footprint in the near term with our Caesars Sportsbook and Caesars Racebook apps as jurisdictions legalize or provide necessary approvals.

We periodically divest of assets in order to raise capital or as a result of a determination that the assets are not core to our business.

We also divested certain assets in connection with obtaining regulatory approvals related to closing of the Merger.

A summary of recently completed divestitures of our properties as of December 31, 2022 is as follows:

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

No customers under 21 years old are allowed to wager on any of our Caesars Sportsbook, Caesars Racebook and iGaming mobile apps.

We periodically divest of assets in order to raise capital or as a result of a determination that the assets are not core to our business, or due to regulatory requirements.

The following is a summary of recently completed divestitures as of December 31, 2023:

Segment Property Date Sold Sales Price

Regional Isle of Capri Casino Kansas City (“Kansas City”) July 1, 2020 (a)

Regional Lady Luck Casino Vicksburg (“Vicksburg”) July 1, 2020 (a)

Regional Eldorado Resort Casino Shreveport (“Eldorado Shreveport”) December 23, 2020 $140 million

Regional MontBleu Casino Resort & Spa (“MontBleu”) April 6, 2021 $15 million

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Discontinued operations:

Regional Harrah’s Reno September 30, 2020 $42 million (b)

Regional Bally’s Atlantic City November 18, 2020

$25 million (b)

Regional Harrah’s Louisiana Downs November 1, 2021 $22 million (b)

Regional Harrah’s Louisiana Downs November 1, 2021 $22 million (a)

Regional Caesars Southern Indiana September 3, 2021 $250 million

N/A Emerald Resort & Casino July 16, 2021 *

N/A Caesars Entertainment UK July 16, 2021 *

N/A Caesars UK Group

July 16, 2021 *

N/A William Hill International July 1, 2022 £2.0 billion

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* Not meaningful.

(a) Kansas City and Vicksburg were sold for aggregate consideration of $230 million.

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

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

In addition to the divestitures above, the operations of Rio were assumed by the lessor on October 2, 2023, and we exited our management agreement with Caesars Dubai on November 16, 2023.

Financial Statements and Supplementary Data — Note 4 for further discussion on these key transactions and any applicable gain (loss) or impairment charges recorded.

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William Hill Acquisition

On September 30, 2020, we announced that we had reached an agreement with William Hill PLC on the terms of a recommended cash acquisition pursuant to which we would acquire the entire issued and to be issued share capital (other than shares owned by us or held in treasury) of William Hill PLC, in an all-cash transaction.

On the acquisition date, our intent was to divest William Hill PLC’s non-U.S.

operations, including the United Kingdom and international online divisions and the retail betting shops (collectively, “William Hill International”), which were held for sale as of the date of the closing of the William Hill Acquisition with such operations reflected within discontinued operations.

On April 22, 2021, we completed the acquisition of William Hill PLC for £2.9 billion , or approximately $3.9 billion .

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

We acquired William Hill PLC and its U.S.

subsidiary, William Hill U.S.

Holdco (“William Hill US” and together with William Hill PLC, “William Hill”) to better position the Company to address the extensive usage of digital platforms, continued legalization in additional states and jurisdictions, and growing bettor demand, which are driving the market for online sports betting platforms in the U.S.

In addition, we continue to leverage the World Series of Poker (“WSOP”) brand and license the WSOP trademarks for a variety of products and services across these digital platforms.

At the time that the William Hill Acquisition was consummated, our intent was to divest William Hill International and as such its results were presented in discontinued operations.

On September 8, 2021, we entered into an agreement to sell William Hill International to 888 Holdings Plc for approximately £2.2 billion.

On April 7, 2022, we amended the agreement to sell William Hill International to 888 Holdings Plc for a revised enterprise value of approximately £2.0 billion.

The amended agreement reflected a £250 million reduction in consideration payable at closing and up to £100 million as deferred consideration to be paid to us, subject to 888 Holdings Plc meeting certain 2023 financial targets.

During the year ended December 31, 2022, the Company recorded impairments to assets held for sale of $503 million within discontinued operations based on the revised and final sales prices.

On July 1, 2022, we completed the sale of William Hill International to 888 Holdings Plc and outstanding borrowings under the Bridge Credit Agreement between the Company and certain lenders party thereto and Deutsche Bank AG, London Branch as administrative agent and collateral agent were immediately repaid.

After the repayment of the Bridge Credit Agreement, other permitted leakage, and the settlement of related forward contracts, we received net proceeds of $730 million.

Including open market repurchases and repayments, we utilized all $730 million to reduce our outstanding debt.

We recognized acquisition-related transaction costs of $21 million, $68 million and $8 million for the years ended December 31, 2022, 2021 and 2020, respectively, excluding additional transaction cost associated with sale of William Hill International.

These costs were associated with legal, professional services and certain severance and retention costs and were primarily recorded in Transaction and other costs in our Statements of Operations.

During the year ended December 31, 2022, we recorded impairments to assets held for sale of $503 million within discontinued operations based on the revised and final sales price.

On July 1, 2022, we completed the sale of William Hill International to 888 Holdings Plc.

We recognized acquisition-related transaction costs of $21 million and $68 million for the years ended December 31, 2022 and 2021, respectively, excluding additional transaction cost associated with sale of William Hill International.

These costs were associated with legal, professional services and certain severance and retention costs and were primarily recorded in Transaction and other costs on our Statements of Operations.

Consolidation of Horseshoe Baltimore

On August 26, 2021, we increased our ownership interest in CBAC Borrower, LLC (“Horseshoe Baltimore”), a property which we also manage, to approximately 75.8% for cash consideration of $55 million.

On August 26, 2021, we increased our ownership interest in CBAC Borrower, LLC (“Horseshoe Baltimore”), a property which we also managed, to approximately 75.8% for cash consideration of $55 million.

As a result of the increase in our ownership interest, our previously held investment was remeasured and we recognized a gain of $40 million for the year ended December 31, 2021.

Subsequent to the change in ownership, we determined that we have a controlling financial interest and began to consolidate the operations of Horseshoe Baltimore.

Merger with Caesars Entertainment Corporation

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

The strategic rationale for the Merger includes, but is not limited to, the following:

• Creation of the largest owner, operator and manager of domestic gaming assets

• Diversification of the Company’s domestic footprint

• Access to iconic brands, rewards programs and new gaming opportunities expected to enhance customer experience

• Realization of significant identified synergies

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.

We recognized acquisition-related transaction costs in connection with the Merger of $30 million and $160 million for the years ended December 31, 2021 and 2020, respectively.

Additionally, on July 10, 2023, we completed the acquisition of the remaining 24.2% equity ownership in Horseshoe Baltimore, utilizing cash on hand, for a total of $66 million.

Investments and Partnerships

The acquired net assets of William Hill included an investment in NeoGames S.A.

(“NeoGames”), a global leader of iLottery solutions and services to national and state-regulated lotteries, and other investments.

On September 16, 2021, we sold a portion of our shares of NeoGames common stock for $136 million which decreased our ownership interest from 24.5% to approximately 8.4%.

Additionally, on March 14, 2022 we sold our remaining 2 million shares at fair value for $26 million.

During the years ended December 31, 2022 and 2021, we recorded losses related to the investment in NeoGames of $34 million and $54 million, respectively, which is included within Other income (loss) on the Statements of Operations.

We have investments in unconsolidated affiliates accounted for under the equity method which are recorded in Investment in and advances to unconsolidated affiliates on the Balance Sheets.

Certain significant investments as of December 31, 2023 and 2022 are discussed below.

Pompano Joint Venture

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Additionally, Cordish is responsible for the development of the master plan for the project with our input and will submit it for our review and approval.

In June 2021, the joint venture issued a capital call and we contributed $3 million, for a total of $4 million in cash contributions since inception of the joint venture.

In October 2023 and June 2021, the joint venture issued capital calls and we contributed $3 million each, respectively, for a total of $7 million in cash contributions since inception of the joint venture.

On February 12, 2021, we contributed 186 acres to the joint venture with a fair value of $61 million.

Total contributions of approximately 209 acres of land have been made with a fair value of approximately $69 million, and we have no further obligation to contribute additional real estate or cash.

During the year ended December 31, 2023, the Company recorded income related to the investment of $64 million, primarily due to the joint venture’s gain on the sale of land.

As of December 31, 2023 and 2022, our investment in the joint venture was $147 million and $80 million, respectively, and is recorded in Investment in and advances to unconsolidated affiliates on the Balance Sheets.

While we hold a 50% variable interest in the joint venture, we are not the primary beneficiary;

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We participate evenly with Cordish in the profits and losses of the joint venture, which are included in Transaction and other costs on our Statements of Operations.

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

The acquired net assets of William Hill included an investment in NeoGames S.A.

(“NeoGames”), a global leader of iLottery solutions and services to national and state-regulated lotteries, and other investments.

On September 16, 2021, we sold a portion of our shares of NeoGames common stock for $136 million which decreased our ownership interest from 24.5% to approximately 8.4%.

Additionally, on March 14, 2022 we sold our remaining 2 million shares at fair value for $26 million.

Reportable Segments

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Presentation of Financial Information

The financial information included in this Item 7 for the periods after our acquisitions of Former Caesars on July 20, 2020, William Hill on April 22, 2021 and of the increase in our ownership percentage and subsequent consolidation of Horseshoe Baltimore on August 26, 2021, is not fully comparable to the periods prior to the acquisitions.

In addition, the presentation of financial information herein for the periods after the Company’s sales of various properties, described above, is not fully comparable to the periods prior to their respective sale dates.

The financial information included in this Item 7 for the periods after our acquisition of William Hill on April 22, 2021, and of the increase in our ownership percentage and subsequent consolidation of Horseshoe Baltimore on August 26, 2021, is not fully comparable to the periods prior to the acquisitions.

In addition, the presentation of financial information herein for the periods after the Company’s divestiture of various properties, described above, is not fully comparable to the periods prior to the date of divestiture.

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, increased competition, as well as by factors or trends 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.

We recommend that you read this MD&A together with our audited consolidated financial statements and the notes to those statements included in this Annual Report on Form 10-K.

Key Performance Metrics

Our primary source of revenue is generated by our gaming operations, including retail and online sports betting, as well as online gaming.

Our primary source of revenue is generated by our gaming operations, which includes our retail and online sports betting and online gaming.

Additionally, we utilize our hotels, restaurants, bars, entertainment venues, retail shops, racing and other services to attract customers to our properties.

Our operating results are highly dependent on the volume and quality of customers visiting and staying at our properties and using our sports betting and iGaming applications.

Our operating results are highly dependent on the volume and quality of customers staying at, or visiting, our properties and using our sports betting, horse racing and iGaming applications.

Key performance metrics include volume indicators such as drop or handle, which refer to amounts wagered by our customers.

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See “Results of Operations” section below.

Complimentary rooms are treated as occupied rooms in our calculation of hotel occupancy.

Complimentary and discounted rooms are treated as occupied rooms in our calculation of hotel occupancy.

The key metrics we utilize to measure our profitability and performance are Adjusted EBITDA and Adjusted EBITDA margin.

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• William Hill Acquisition – On April 22, 2021, we consummated the acquisition of 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 £2.9 billion , or approximately $3.9 billion.

We recognized acquisition-related transaction costs of $21 million, $68 million and $8 million for the years ended December 31, 2022, 2021 and 2020, respectively, excluding additional transaction costs associated with sale of William Hill International.

We recognized acquisition-related transaction costs of $21 million and $68 million for the years ended December 31, 2022 and 2021, respectively, excluding additional transaction costs associated with sale of William Hill International.

• Consolidation of Horseshoe Baltimore – On August 26, 2021, we increased our ownership interest in Horseshoe Baltimore to approximately 75.8%.

Prior to the purchase, we held an interest in Horseshoe Baltimore of approximately 44.3% which was accounted for as an equity method investment.

Subsequent to the change in ownership, we determined we have a controlling financial interest and have consolidate the operations of Horseshoe Baltimore.

Subsequent to the change in ownership, we determined we have a controlling financial interest and consolidated the operations of Horseshoe Baltimore.

As a result of the consolidation, we recognized a gain of $40 million during the year ended December 31, 2021.

• Merger with Caesars Entertainment Corporation – The Merger closed on July 20, 2020 and we have recognized acquisition-related transaction costs in connection with the Merger of $30 million and $160 million for the years ended December 31, 2021 and 2020, respectively.

Additionally, on July 10, 2023, we completed the acquisition of the remaining 24.2% equity ownership in Horseshoe Baltimore, utilizing cash on hand, for a total of $66 million.

Divestitures and Discontinued Operations

• Divestitures and Discontinued Operations – See “ Overview ” section above for detail of properties divested, including related discontinued operations.

• The operations of Rio were assumed by the lessor on October 2, 2023, and we exited our management agreement with Caesars Dubai on November 16, 2023.

Financing Transactions

• Debt Transactions - We continue to utilize free cash flow to reduce our leverage and extend the maturity of our outstanding debt.

• Debt Transactions – We continue to utilize free cash flow to reduce our leverage, extend the maturity of our outstanding debt and balance our mix of fixed and variable debt.

The following are the key financing transactions and their effects on our operations, from the use of free cash flow, unless otherwise noted:

◦ Utilized proceeds from the sale of William Hill International and cash on hand to make partial prepayments of $755 million of the outstanding principal of the CRC Incremental Term Loan.

◦ Repaid $300 million of the outstanding principal of the CRC Term Loan, excluding the prepayment resulting from the proceeds of the CEI Term Loan A described below.

◦ Purchased a total of $11 million in principal amount of the CRC Senior Secured Notes and $89 million in principal amount of CEI Senior Notes due 2027.

◦ Amended the CEI Credit Agreement and utilized the entire proceeds of a new $750 million CEI Term Loan A to make a partial prepayment of the outstanding principal of the CRC Term Loan, terminate the CRC Revolving Credit Facility and increase the aggregate principal amount of the CEI Revolving Credit Facility to $2.25 billion.

◦ For the years ended December 31, 2022, 2021 and 2020, we recorded loss on extinguishment of debt of $85 million, $236 million and $197 million respectively, which is recorded within Loss on extinguishment of debt on the Statement of Operations due to the aforementioned activity.

◦ Refer to the Liquidity and Capital Resources section below for a further discussion of our recent debt transactions, including our financing transactions in 2023 in which we issued new CEI Senior Secured Notes due 2030, a new CEI Term Loan B, and fully repaid the CRC Term Loan and CRC Incremental Term Loan.

◦ Issued $2.0 billion CEI Senior Secured Notes due 2030 and amended the CEI Credit Agreement and incurred a new $2.5 billion CEI Term Loan B.

Net proceeds received from these transactions were used to repay the $3.4 billion outstanding principal amount of the CRC Term Loan and the $1.0 billion outstanding principal amount of the CRC Incremental Term Loan on February 6, 2023.

◦ Fully repaid $267 million of the outstanding principal balance of the Baltimore Term Loan as of July 17, 2023.

◦ Prepaid the outstanding $400 million Forum Convention Center Mortgage Loan on May 1, 2023.

◦ For the years ended December 31, 2023, 2022 and 2021, we recorded extinguishment charges of $200 million, $85 million and $236 million, respectively, which are recorded within Loss on extinguishment of debt on the Statements of Operations due to the aforementioned activity.

◦ Refer to the Liquidity and Capital Resources section below for further discussion of our recent debt transactions, including our financing transactions subsequent to December 31, 2023, in which we issued $1.5 billion of new CEI Senior Secured Notes due 2032 and a new $2.9 billion CEI Term Loan B-1.

Net proceeds received from these transactions, together with borrowings under our CEI Revolving Credit Facility, were used to tender, redeem, repurchase, defease, and/or satisfy and discharge the CEI Senior Secured Notes due 2025 and the CRC Senior Secured Notes.

Other Significant Factors

• Economic Factors Impacting Discretionary Spending – Gaming and other leisure activities we offer represent discretionary expenditures which may be sensitive to economic downturns.

The resurgence of the Omicron variant of COVID-19 impacted the beginning of the year, however, many of our properties experienced positive trends during much of the year ended December 31, 2022, including higher hotel occupancy and rates, particularly in Las Vegas, and increased gaming and food and beverage volumes coupled with improved product mix.

The reduction in mandates and restrictions, combined with pent up consumer demand and supplemental discretionary spend from governmental stimulus, resulted in strong results across our properties during 2021.

In addition to the loss of government stimulus programs from prior year that increased consumer discretionary spend, we are monitoring the trend of higher inflation in the current year and the possible implications to our customers.

Although we have seen some periods of reduced visitation from those customers that are most affected by inflation, visitation from those customers not as sensitive to inflation remains steady or has slightly improved.

• Impairment Charges – As a result of our finalized and approved capital and operating plans and the completion of our 2022 annual impairment testing, we recognized impairment charges during the year ended December 31, 2022 in our Regional segment primarily due to an increase in the related discount rates, which represents the higher required cost of capital as a result of the macroeconomic environment and projected outlook.

We identified one property, where the estimated fair value of the associated gaming rights was less than the carrying value and we recorded an impairment of $30 million.

In addition, we identified two properties, where the estimated fair value of the enterprise was less than the carrying value and recorded an impairment to goodwill of $78 million.

• New Developments and Re-openings – During the construction of the permanent facilities for Caesars Virginia and Harrah’s Columbus Nebraska, we opened temporary gaming facilities during the second quarter of 2023.

Caesars Virginia’s temporary facility opened on May 15, 2023 and Harrah’s Columbus Nebraska’s temporary facility opened on June 12, 2023.

In addition to the temporary facilities, the reopening of Horseshoe Lake Charles in December 2022 has contributed to the Regional segment’s performance when compared to the prior year period.

• Caesars Sportsbook, Caesars Racebook and iGaming mobile apps – During the year ended December 31, 2023, we launched Caesars Sportsbook in new jurisdictions, migrated our sports betting platform to Liberty in Nevada, and launched our new online and mobile iGaming application, Caesars Palace Online Casino.

As new states and jurisdictions have legalized sports betting, we have made varying degrees of upfront investments executed through marketing campaigns and promotional incentives to acquire new customers and establish our presence.

For example, in connection with the launch of our Caesars Sportsbook app in New York and Louisiana in January 2022, we experienced negative net revenue in the first quarter of 2022 resulting from a substantial amount of bonus cash and matched deposits issued to customers as sign-on incentives, which exceeded our gaming win.

We continue to adjust our level of investment during the launch period in new jurisdictions based, in part, on prior experience and do not expect such investment to continue at elevated levels subsequent to the initial launch period.

During the year ended December 31, 2023, promotional and marketing expenses have significantly decreased as compared to the prior year period.

• Income Taxes – Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use existing deferred tax assets.

During the second quarter of 2023, we evaluated our forecasted adjusted taxable income and objectively verifiable evidence and placed substantial weight on our 2022 and 2023 quarterly earnings, adjusted for non-recurring items, including the interest expense disallowed under current tax law.

Accordingly, we determined it was more likely than not that a portion of the federal and state deferred tax assets will be realized and, as a result, during the second quarter of 2023, we reversed the valuation allowance related to these deferred tax assets and recorded an income tax benefit of $940 million.

We are still carrying a valuation allowance on certain federal and state deferred tax assets that are not more likely than not to be realized in the future.

We have assessed the changes to the valuation allowance, including realization of the disallowed interest expense deferred tax asset, using the integrated approach.

• Economic Factors Impacting Discretionary Spending – Gaming and other leisure activities we offer represent discretionary expenditures which may be sensitive to economic downturns, such as t he resurgence of the Omicron variant of COVID-19 that negatively impacted the first quarter of 2022.

We also monitor recent trends, including higher inflation and interest rates, and the related effects on our customers, and our operations.

• Impairment Charges – As a result of our finalized and approved capital and operating plans and the completion of our 2023 annual impairment testing, we recognized impairment charges during the year ended December 31, 2023 in our Regional segment.

These impairments were primarily due to a decrease in projected cash flows at certain regional properties mainly due to increased competition.

We identified one reporting unit where the estimated fair value of the associated gaming rights was less than the carrying value and recorded an impairment of $81 million.

In addition, we identified one reporting unit with an estimated fair value below its carrying value, resulting in total impairment of $14 million to goodwill.

During the year ended December 31, 2022, the Company recognized impairment charges in our Regional segment related to goodwill and gaming rights totaling $78 million and $30 million, respectively, due to an increase in the related discount rates, which represents the higher required cost of capital as a result of the macroeconomic environment and projected outlook.

In December 2021, we approved a capital plan which included the planned rebranding of certain of our properties.

We utilized an income approach to determine the fair value of the trademarks subject to rebranding based on their expected future cash flows, which resulted in an impairment charge of $102 million during the year ended December 31, 2021.

During the year ended December 31, 2020, we recognized impairment charges in our Regional segment related to goodwill and trade names totaling $100 million and $16 million, respectively, due to the effects of COVID-19.

In addition, as a result of entering agreements to sell properties in our Regional segment, impairment charges totaling $99 million were recorded during the year ended December 31, 2020 due to the carrying value exceeding the net sales proceeds.

• Weather Disruption – In late August 2020, our Regional segment was negatively impacted by Hurricane Laura, causing severe damage to Isle of Capri Casino Hotel Lake Charles.

As a result of the damage, the property remained closed during the construction of a new land-based location, Horseshoe Lake Charles, which opened in December 2022.

During the year ended December 31, 2022, we reached a final settlement agreement with the insurance carriers for the damage and disruption for a total amount of $128 million, before our insurance deductible of $25 million.

We have received a total of $103 million related to damaged fixed assets, remediation costs and business interruption.

• Weather Disruption – During the first quarter of 2023, our Regional segment was negatively impacted by severe winter weather, particularly in northern Nevada, which caused poor and unsafe travel conditions reducing visitation to our Lake Tahoe and Reno properties.

During the year ended December 31, 2022, we reached a final settlement agreement with the insurance carriers for the damage and disruption caused by Hurricane Laura to our Lake Charles property in 2020 for a total amount of $128 million, before our insurance deductible of $25 million.

We recorded gains of $38 million and $21 million during the years ended December 31, 2022 and 2021 , respectively, which are included in Transaction and other costs in our Statements of Operations, as proceeds received for the cost to replace damaged property were in excess of respective carrying value of the assets.

• Caesars Sportsbook and Caesars Racebook – In connection with the launch and rebranding of the Caesars Sportsbook app, our Caesars Digital segment launched a significant marketing campaign in the second half of 2021 with distinguished actors, former athletes and other media personalities.

As new states and jurisdictions have legalized sports betting, we have made significant upfront investments which have been executed through marketing campaigns and promotional incentives to acquire new customers and establish ourselves as an industry leader.

For example, in connection with the launch of our Caesars Sportsbook app in the state of New York on January 8, 2022 and Louisiana on January 28, 2022, we experienced negative net revenue at the beginning of 2022 resulting from a substantial amount of bonus cash and matched deposits issued to customers as sign-on incentives, which exceeded our gaming win.

Our level of investment and types of incentives provided are discretionary and are not expected to continue at elevated levels subsequent to the initial launch period.

In addition, as our Caesars Racebook launches in new states and jurisdictions, we may offer deposit matching incentives to new users.

A significant portion of our marketing and promotional costs are variable and we continue to monitor and adjust our level of investment based on jurisdiction specific conditions, customer behaviors, and results observed from prior state launches.

Results of Operations

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Total $ 11,528 $ 10,821 $ 9,570

Net loss $ (910) $ (1,016) $ (1,758)

Net income (loss)

$ 828 $ (910) $ (1,016)

Adjusted EBITDA (b) :

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(154) (124) (168)

Total Segment Adjusted EBITDA $ 3,243 $ 2,990 $ 794

Net loss margin (8.4) % (10.6) % (48.5) %

$ 3,938 $ 3,243 $ 2,990

Net income (loss) margin

7.2 % (8.4) % (10.6) %

Adjusted EBITDA margin 34.2 % 30.0 % 31.2 %

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Net Revenues $ 11,528 $ 10,821 $ 9,570 $ 707 6.5 % $ 1,251 13.1 %

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* Not meaningful.

Despite the resurgence of the Omicron variant during the beginning of 2022, consolidated net revenues increased for the year ended December 31, 2022.

The Company’s net revenues have benefited from steady gaming volumes at our properties, increased hotel occupancy and room rates, and improved food and beverage offerings.

Banquets and conventions have improved during the current year, in addition to a strengthening of international visitation.

The Company continues to remain strategic with new food and beverage offerings with a focus on operating margins and product mix.

Restaurant covers have increased during the year, driven by our Las Vegas segment.

Live entertainment events have also increased year over year following the prolonged impacts from COVID-19.

Additionally, the consolidation of Horseshoe Baltimore on August 26, 2021 contributed to the increase in net revenues for the year ended December 31, 2022.

These increases were offset slightly by negative gaming revenue in our Caesars Digital segment in the first quarter of 2022 and construction disruption experienced at certain properties.

Consolidated net revenues increased for the year ended December 31, 2023 primarily due to higher gaming revenues in the Caesars Digital segment resulting from higher sports betting hold and additional state launches of our online and retail Caesars Sportsbooks.

Promotional allowances offered during launches in new jurisdictions were significantly reduced year over year.

Hotel occupancy rates within the Las Vegas segment continued to improve as compared to the same prior year periods and also contributed to the increase in net revenues.

The Regional segment benefited from the opening of two temporary gaming facilities, Caesars Virginia on May 15, 2023 and Harrah’s Columbus Nebraska on June 12, 2023, as well as the reopening of Horseshoe Lake Charles in December 2022.

Further, the Omicron variant of COVID-19 negatively impacted prior year results during the first quarter of 2022 across substantially all of our properties, including disruptions to group and conventions, banquets, and scheduled concert events.

These improved results were partially offset by increased competition associated with new casino resorts opening in some of our regional markets, construction disruptions, and inclement weather across the country, particularly in northern Nevada, which restricted travel in the first quarter of 2023.

The Company continues to expand partnerships with iconic entertainers to host concerts and performances, and celebrity chefs to offer new food and beverage venues to drive new and repeat visitation to our properties.

Operating Expenses

10 unchanged sentences

Depreciation and amortization 1,261 1,205 1,126 56 4.6 % 79 7.0 %

Transaction and other costs 14 144 270 (130) (90.3) % (126) (46.7) %

Transaction and other costs, net

(13) 14 144 (27) * (130) (90.3) %

Total operating expenses $ 9,056 $ 9,082 $ 8,110 $ (26) (0.3) % $ 972 12.0 %

___________________

* Not meaningful.

Casino expenses consist primarily of salaries and wages associated with our gaming operations, gaming taxes and marketing and promotions attributable to our Caesars Digital segment.

2 unchanged sentences

Other expenses consist principally of salaries and wages and costs of goods sold associated with our retail, entertainment and other operations.

Casino, food and beverage, hotel, and other expenses for the year ended December 31, 2022 increased year over year following the revenue increases noted above, in addition to the impacts of the William Hill Acquisition and the consolidation of Horseshoe Baltimore.

Advertising costs consisting of television, radio and internet marketing campaigns directly attributable to our Caesars Sportsbook app also contributed to the increase, particularly during the launch of the app in New York and Louisiana during the first quarter.

These increases were partially offset as we scaled back our advertising efforts subsequent to the first quarter of 2022 and continue to identify more efficient methods to manage marketing and promotional spend and reduce gaming expenses within our Las Vegas and Regional segments.

Further, we have managed increases in food costs by focusing on efficiencies within food and beverage venues and menu options.

Casino expenses decreased for the year ended December 31, 2023 as compared to the same prior year period due to a reduction in advertising costs from the promotion of our Caesars Sportsbook app and Caesars Digital’s expansion into new jurisdictions, particularly in the first quarter of 2022.

Food and beverage and hotel expenses have increased in connection with increased revenues;

however, we continue to focus on labor efficiencies to manage rising labor costs and strategically manage our marketing and advertising spend to reduce our casino expenses.

Similarly, we continue to manage recent increases in food costs by focusing on efficiencies within food and beverage venues and menu options.

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, internal audit, and property taxes.

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

General and administrative expenses and depreciation and amortization expense increased for the year ended December 31, 2022 as compared to the same prior year period, mainly due to the William Hill Acquisition and the consolidation of Horseshoe Baltimore.

Property information technology costs, other marketing expenses and utility expenses also increased compared to the prior year.

Corporate expenses include unallocated expenses such as payroll, inclusive of the annual bonus, stock-based compensation, professional fees, and other various expenses not directly related to the Company’s operations.

Transaction and other costs for the year ended December 31, 2022 decreased year over year due to a gain of approximately $38 million as proceeds received for the Isle of Capri Casino Hotel Lake Charles property damage were in excess of the respective carrying value of the assets.

Additionally, no significant acquisition related transaction costs were incurred during the year as compared to the William Hill Acquisition in the prior year.

Transaction and other costs, net for the year ended December 31, 2023 primarily includes non-cash changes in equity method investments and a gain of $29 million associated with proceeds received from the sale of a potential insurance recovery.

Offsetting these costs are non-cash losses on the write down and disposal of assets and pre-opening costs in connection with new temporary facility openings.

Transaction and other costs, net for the year ended December 31, 2022 primarily represents professional services for integration activities and various contract exit or termination costs, offset by a $38 million gain in the first quarter of 2022 resulting from insurance proceeds received in excess of the respective carrying value of damaged assets associated with our Lake Charles property.

Other Expense

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Other income (loss) 10 46 (198) (36) (78.3) % 244 *

Benefit (provision) for income taxes 41 283 (132) (242) (85.5) % 415 *

Benefit for income taxes

888 41 283 847 * (242) (85.5) %

___________________

* Not meaningful.

For the year ended December 31, 2022, interest expense, remained consistent year over year as a result of decreased interest expense associated with our debt instruments, offset by increases in interest expense associated with the financing obligations related to our leases with VICI and GLPI which contain annual escalators which have resulted in increased interest expense year over year.

Repayments and early extinguishments during the prior year, which continued into the current year, and favorable interest rates from new debt have resulted in lower interest expense associated with our debt.

Loss on extinguishment of debt for the year ended December 31, 2022 was attributable to the extinguishment of deferred financing costs and discounts associated with early partial repayments of the CRC Term Loan and the CRC Incremental Term Loan.

Loss on extinguishment of debt for the year ended December 31, 2021 was related to early repayment premiums, and extinguishment of deferred financing costs and discounts associated with the prepayments of the CRC Notes and CEI Senior Notes, the repricing of the CRC Incremental Term Loan, and the early extinguishment of the 5% Convertible Notes.

For the year ended December 31, 2022, other income (loss) primarily consisted of a gain related to the resolution of a portion of disputed claims liability related to Former Caesars’ bankruptcy and a change in the fair value of foreign exchange forward contracts, offset by the change in fair value of investments.

For the year ended December 31, 2021, other income (loss) primarily consisted of a loss on the change in fair value of investments and a loss on the change in fair value of the derivative liability related to the 5% Convertible Notes.

The effective tax rate was 7.2% for 2022, 22.3% for 2021, and (8.2)% for 2020.

The effective tax rate in 2022 differed from the statutory rate of 21% primarily due to an increase in tax expense due to state rate changes and a deferred tax adjustment related to the tax impact of the settlement of preexisting relationships upon the William Hill Acquisition in 2021 that was partially offset by changes to the valuation allowance.

The effective tax rate in 2020 differed from the statutory rate of 21% primarily due to an increase in valuation allowance against the deferred tax assets due to the series of transactions with VICI during the year.

Such transactions did not occur in 2021.

For the year ended December 31, 2023, interest expense, net increased year over year due to annual escalators in our financing obligations related to our VICI Leases, including escalators based on the Consumer Price Index (“CPI”) that take effect in November of each year.

In addition, although we have reduced our outstanding debt, rising interest rates have negatively impacted our borrowing rates and resulted in interest expense related to debt service to be flat compared to the prior year.

For the years ended December 31, 2023 and 2022, loss on extinguishment of debt was primarily related to the prepayments of the Caesars Resort Collection (“CRC”) Term Loan and the CRC Incremental Term Loan.

In addition, on July 17, 2023, we repaid the Baltimore Term Loan.

Other income decreased for the year ended December 31, 2023, as compared to prior year, mainly due to a change in the fair value of foreign exchange forward contracts and a gain related to the resolution of a disputed claims liability, offset by the change in fair value of investments, all of which were recorded in the prior year.

The income tax benefit was $888 million for 2023 and $41 million for 2022.

The reported income tax benefit in 2023 differed from the statutory income tax benefit primarily due to the partial release of federal and state valuation allowances.

During the second quarter of 2023, we reversed the valuation allowance related to certain deferred tax assets and recorded a one-time income tax benefit of $940 million, as we determined it was more likely than not that a portion of our federal and state deferred tax assets would be realized.

Refer to Item 8.

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Adjusted EBITDA margin 45.1 % 45.8 % 46.0 % (0.7) pts (0.2) pts

Net income (loss) attributable to Caesars $ 1,021 $ 641 $ (287) $ 380 59.3 % $ 928 *

Net income attributable to Caesars

$ 1,042 $ 1,021 $ 641 $ 21 2.1 % $ 380 59.3 %

* Not meaningful.

Las Vegas segment’s net revenues and net income (loss) and Adjusted EBITDA increased year over year.

Visitation to Las Vegas has continued to trend toward levels experienced prior to the COVID-19 pandemic.

Table game drop and slot handle have increased with slight increases in hold.

Increased casino revenues were slightly offset by gaming capacity disruption at Caesars Palace caused by the renovation to the front entrance during the third quarter of 2022.

Restaurant covers have increased during the year and we continue to expand food and beverage offerings, including Bobby’s Burgers, Nobu, and The Bedford by Martha Stewart at Paris, among others, with additional venues scheduled to open in 2023.

Banquets and conventions have contributed to the positive results during the year helping continued growth in hotel occupancy and room rates.

Slot win percentage in Las Vegas during the year ended December 31, 2022 was within our typical range.

The Las Vegas segment’s net revenues, net income and Adjusted EBITDA increased year over year primarily due to higher hotel, food and beverage and entertainment revenues.

The increase in food and beverage revenues was mainly driven by higher restaurant covers and improved product mix associated with the additions of new casual and premier dining venues.

Other revenue increased primarily due to entertainment revenues attributable to an increase in both the quality and number of headliner performances in the current year compared to prior year.

In addition, during the first quarter of 2022, the resurgence of the Omicron variant of COVID-19 had a significant negative impact on visitation, group and conventions, and scheduled concert events.

As a result, the Las Vegas segment experienced increased visitation during 2023 compared to the prior year which has driven higher hotel occupancy, improved room rates, higher food and beverage revenues and additional entertainment revenues.

The increases in net revenues, net income and Adjusted EBITDA were partially offset by growth in overall union and non-union wages and headcount.

Additionally, our Las Vegas segment experienced challenges in the middle of 2023, related to construction disruption and roadwork on the Las Vegas Strip.

As a result, the Las Vegas segment’s Adjusted EBITDA margin decreased slightly as compared to the prior year.

Slot win percentage in the Las Vegas segment during the year ended December 31, 2023 was within our typical range.

Regional Segment

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Adjusted EBITDA margin 34.0 % 34.8 % 35.7 % (0.8) pts (0.9) pts

Net income (loss) attributable to Caesars $ 463 $ 637 $ (349) $ (174) (27.3) % $ 986 *

Net income attributable to Caesars

$ 377 $ 463 $ 637 $ (86) (18.6) % $ (174) (27.3) %

* Not meaningful.

Regional segment’s net income (loss) decreased during the year ended December 31, 2022 primarily due to impairments of $108 million recognized during the period, and a non-recurring prior year gain of $40 million related to our investment in Horseshoe Baltimore.

Net revenues and Adjusted EBITDA increased slightly for the year ended December 31, 2022 compared to the same prior year period, in part from the consolidation of Horseshoe Baltimore.

Table game volume for the year ended December 31, 2022 remained comparable, however slot volume decreased slightly from strong results during 2021 due to the reduction in supplemental discretionary spend from governmental stimulus.

Performance among our Regional properties was affected by a resurgence of the Omicron variant of COVID-19 in the beginning of 2022;

however, the Regional segment trended positively due to improved food and beverage offerings, increased hotel revenues and an increase in banquets.

We continue to monitor trends observed during the current year of periods of reduced visitation from certain customers most affected by current inflationary pressures whereas visitation from customers not as affected by such pressures remains steady or has slightly improved.

Further, renovations and capital projects at Harrah’s New Orleans and Atlantic City properties have led to slight disruptions in operations.

Despite these headwinds, and the impact of our recent divestitures described above, our results of operations remain strong as compared to pre-pandemic years.

The Regional segment’s net revenues increased for the year ended December 31, 2023 compared to the same prior year period, primarily related to incremental net revenues generated from the reopening of Horseshoe Lake Charles in the fourth quarter of 2022 and the opening of our temporary gaming facilities at Caesars Virginia on May 15, 2023 and Harrah’s Columbus Nebraska on June 12, 2023.

These increases were partially offset by competition associated with new casino resorts opening in some of our regional markets, construction disruption from renovation projects at certain of our properties and inclement weather across the country, particularly in northern Nevada, which restricted travel in the first quarter of 2023.

In addition, wage and headcount increases resulted in higher labor costs during the current year.

Increased interest expense associated with our VICI Leases and additional depreciation expense related to our new gaming facilities led to a decline in net income as compared to the same prior year period.

As a result, Adjusted EBITDA decreased as compared to the prior year.

Slot win percentage in the Regional segment during the year ended December 31, 2023 was within our typical range.

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Adjusted EBITDA margin 3.9 % (121.5) % (141.2) % * 19.7 pts

Net income (loss) attributable to Caesars $ (790) $ (580) $ 26 $ (210) (36.2) % $ (606) *

Net loss attributable to Caesars

$ (91) $ (790) $ (580) $ 699 88.5 % $ (210) (36.2) %

___________________

* Not meaningful.

1 unchanged sentence

Promotional and complimentary incentives for poker were $14 million, $21 million and $18 million for the year ended December 31, 2023, 2022 and 2021, respectively.

(b) Caesars Digital generated an additional $1,223 million and $706 million of sports betting handle for the year ended December 31, 2022 and 2021, respectively, which is not included in this table, for select wholly-owned and third-party operations for which Caesars Digital provides services and we receive all, or a share of, the net profits.

(b) Caesars Digital generated an additional $1.1 billion, $1.2 billion and $706 million of sports betting handle for the year ended December 31, 2023, 2022 and 2021, respectively, which is not included in this table, for select wholly-owned and third-party operations for which Caesars Digital provides services and we receive all, or a share of, the net profits.

Hold related to these operations was 10.4%, 11.0% and 9.7% for the year ended December 31, 2023, 2022 and 2021, respectively.

Sports betting handle includes $50 million and $40 million for the year ended December 31, 2022 and 2021, respectively, related to horse racing and pari-mutuel wagers.

Caesars Digital includes the operations for our retail and mobile sports betting, online casino, poker and horse racing, which includes our Caesars Sportsbook and Caesars Racebook apps.

Caesars Digital’s sports betting handle, iGaming handle, and net revenues increased significantly for the year ended December 31, 2022 compared to the same prior year period due to the William Hill Acquisition, the launch of our Caesars Sportsbook app in 2021, and the expansion of sports betting into additional states and jurisdictions subsequent to the acquisition.

Net Revenues increased overall during the year ended December 31, 2022 due to higher handle and improved sports betting hold.

Net revenues during the first quarter of 2022 were negatively impacted by costs associated with significant promotions offered with the launch of our Caesars Sportsbook, particularly in New York and Louisiana, which included cash bonuses and matched deposits to new customers as sign-on incentives.

Following the first quarter, Caesars digital’s operations continued to improve for the remainder of 2022, nearly reaching positive net income and adjusted EBITDA during the fourth quarter.

Sports betting handle includes $45 million, $50 million and $40 million for the year ended December 31, 2023, 2022 and 2021, respectively, related to horse racing and pari-mutuel wagers.

Caesars Digital reflects the operations for retail and mobile sports betting, iGaming, poker, and horse racing, which includes our Caesars Sportsbook, Caesars Racebook and iGaming mobile apps.

Caesars Digital’s net revenues, net loss, Adjusted EBITDA, and Adjusted EBITDA margin improved for the year ended December 31, 2023, as compared to prior year, primarily due to higher sports betting hold combined with lower year over year promotional and marketing expenses for launches in new states and jurisdictions in 2023.

The increase in iGaming handle was slightly offset by decreased hold during the period.

During the third quarter of 2023, we completed the migration of sports betting operations in Nevada to the Liberty platform and launched our new Caesars Palace Online Casino application in states and territories where we operate iGaming.

We experienced negative net revenue in the first quarter of 2022 as a result of increased promotional offerings for new state launches in New York and Louisiana.

We have refined our promotional intensity during the launch period in new jurisdictions based, in part, on prior experience and do not expect such investments to continue at elevated levels subsequent to initial launch periods.

As sports betting and online casinos expand through increased state or jurisdictional legalization, new product launches, and customer adoption, variations in hold percentages and increases in promotional and marketing expenses in highly competitive markets during promotional periods may negatively impact Caesars Digital’s net revenues, net income, Adjusted EBITDA and Adjusted EBITDA margin in comparison to current or prior periods.

Sports betting and iGaming hold percentages for the year ended December 31, 2023 were within our typical range.

We expect to continue to expand into new jurisdictions with our apps, our Caesars branded retail sportsbooks, and our iGaming applications, to the extent such jurisdictions allow.

Historically we have deployed a significant level of marketing spend to build brand awareness and acquire and retain customers when entering new jurisdictions.

As a result of our established market presence, we expect to remain strategic with our level of investment in new and existing markets.

As sports betting and online casinos expand through increased state legalization and customer adoption, growth in marketing and promotional costs in highly competitive markets negatively impacts Caesars Digital Adjusted EBITDA and Adjusted EBITDA margins in comparison to prior periods.

These periods are not expected to be long in duration as we use our discretion to determine the ongoing level of investment for a particular jurisdiction.

Managed and Branded Segment

1 unchanged sentence

(Dollars in millions) 2023 2022 2021 2023 vs 2022

Food and beverage $ — $ — $ 1 $ — * $ (1) (100.0) %

Other $ 307 $ 282 $ 278 $ 25 8.9 % $ 4 1.4 %

10 unchanged sentences

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

In September 2023, we recorded $25 million of additional other revenue related to the termination of the Caesars Dubai management agreement, which has been excluded from Adjusted EBITDA.

Years Ended December 31, Variance Percent Change Variance Percent Change

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Management has historically used Adjusted EBITDA when evaluating operating performance because we believe that the inclusion or exclusion of certain recurring and non-recurring items is necessary to provide a full understanding of our core operating results and as a means to evaluate period-to-period results.

Adjusted EBITDA represents net income (loss) before interest income or interest expense net of interest capitalized, (benefit) provision for income taxes, unrealized (gain) loss on investments and marketable securities, depreciation and amortization, stock-based compensation, impairment charges, 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 transaction costs associated with our acquisitions and divestitures such as (gain) loss on sale, sign-on and retention bonuses, severance expense, business integration and optimization costs, contract exit or termination costs, certain litigation awards and settlements, losses on inventory associated with properties temporarily closed as a result of

the COVID-19 public health emergency, and certain regulatory settlements.

Adjusted EBITDA represents net income (loss) before interest income or interest expense net of interest capitalized, (benefit) provision for income taxes, depreciation and amortization, stock-based compensation expense, (gain) loss on extinguishment of debt, impairment charges, other (income) loss, net income (loss) attributable to noncontrolling interests, transaction costs associated with our acquisitions, developments, and divestitures, and non-cash changes in equity method investments.

Adjusted EBITDA also excludes the expense associated with certain of our leases as these transactions were accounted for as financing obligations and the associated expense is included in interest expense.

Adjusted EBITDA is not a measure of performance or liquidity calculated in accordance with GAAP.

Adjusted EBITDA is not

a measure of performance or liquidity calculated in accordance with GAAP.

Adjusted EBITDA 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 VICI Properties Inc.

and GLPI and certain regulatory gaming assessments, which can be significant.

Uses of cash flows that are not reflected in Adjusted EBITDA include capital expenditures, interest payments, income taxes, debt principal repayments, and payments under our leases with affiliates of VICI Properties Inc.

and GLPI, which can be significant.

As a result, Adjusted EBITDA should not be considered as a measure of our liquidity.

1 unchanged sentence

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 the years ended December 31, 2022, 2021 and 2020, respectively, in addition to reconciling net income (loss) to Adjusted EBITDA in accordance with GAAP (unaudited):

The following table summarizes our Adjusted EBITDA for the years ended December 31, 2023, 2022 and 2021 in addition to reconciling net income (loss) to Adjusted EBITDA in accordance with GAAP (unaudited):

Years Ended December 31,

(In millions) 2023

Net loss attributable to Caesars $ (899) $ (1,019) $ (1,757)

Net income (loss) attributable to Caesars

$ 786 $ (899) $ (1,019)

Net income (loss) attributable to noncontrolling interests 42 (11) 3

Discontinued operations, net of income taxes — 386 30

(Benefit) provision for income taxes (41) (283) 132

Benefit for income taxes

(888) (41) (283)

Other (income) loss (a)

8 unchanged sentences

Pre-consolidation, pre-acquisition, and pre-disposition EBITDA, net (c)

(15) (20) (23)

Total Adjusted EBITDA $ 3,923 $ 3,223 $ 2,967

____________________

(a) Other (income) loss primarily includes the net changes in fair value of (i) investments held by the Company (ii) foreign exchange forward contracts (iii) the disputed claims liability related to Former Caesars’ bankruptcy prior to the Merger, and (iv) the derivative liability related to the 5% Convertible Notes, which were fully converted during the year ended December 31, 2021, and the change in the foreign exchange rate associated with restricted cash held in GBP associated with our acquisition of William Hill.

(b) Transaction costs and other primarily includes costs related to the William Hill Acquisition, the Merger, various contract or license termination exit costs, professional services for integration activities and non-cash changes in equity method investments partially offset by gains resulting from insurance proceeds received in excess of the respective carrying value of the assets damaged at Lake Charles by Hurricane Laura.

(c) Results of operations for Horseshoe Baltimore for periods prior to the consolidation resulting from the Company’s increase in its ownership interest on August 26, 2021, William Hill prior to its acquisition on April 22, 2021, and Former Caesars prior to the Merger on July 20,2020 are added to Adjusted EBITDA.

The results of operations for certain properties divested prior to divestiture are subtracted from Adjusted EBITDA.

(a) Other (income) loss primarily includes the net changes in fair value of (i) investments held by the Company, (ii) foreign exchange forward contracts, (iii) a disputed claims liability, and (iv) the derivative liability related to the 5% convertible notes, which were fully converted during the year ended December 31, 2021, and the change in the foreign exchange rate associated with restricted cash held in GBP associated with our acquisition of William Hill.

(b) Transaction costs and other primarily includes (i) net proceeds received in exchange for participation rights in a potential insurance recovery, (ii) proceeds received for the termination of the Caesars Dubai management agreement, (iii) insurance proceeds received in excess of the respective carrying value of damaged assets associated with the Lake Charles property, (iv) costs related to non-cash losses on the write down and disposal of assets, professional services for transaction and integration costs, various contract exit or termination costs, and pre-opening costs in connection with new temporary facility openings, and (v) non-cash changes in equity method investments.

(c) Results of operations for Horseshoe Baltimore prior to its consolidation on August 26, 2021 and William Hill prior to its acquisition on April 22, 2021 are added to Adjusted EBITDA.

The results of operations of divested properties prior to their respective divestiture dates are subtracted from Adjusted EBITDA.

See Item 7 - Overview above.

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We are a holding company and our only significant assets are ownership interests in our subsidiaries.

Our ability to fund our obligations depends on existing cash on hand, contracted asset sales, cash flows from our subsidiaries and our ability to raise capital.

Our primary sources of liquidity and capital resources are existing cash on hand, cash flows from operations, availability of borrowings under our revolving credit facilities, proceeds from the issuance of debt and equity securities and proceeds from completed asset sales.

Our ability to fund our obligations depends on existing cash on hand, cash flows from our subsidiaries and our ability to raise capital.

Our primary sources of liquidity and capital resources are existing cash on hand, cash flows from operations, availability of borrowings under our revolving credit facility, proceeds from the issuance of debt and equity securities and proceeds from completed asset sales.

Our cash requirements may fluctuate significantly depending on our decisions with respect to business acquisitions or divestitures and strategic capital and marketing investments.

7 unchanged sentences

___________________

(a) Revolver capacity includes $2.25 billion under our CEI Revolving Credit Facility, as amended, maturing in January 2028, less $40 million reserved for specific purposes, and $10 million under our Baltimore Revolving Credit Facility, as amended maturing in July 2023.

(a) Revolver capacity includes $2.25 billion under our CEI Revolving Credit Facility, maturing in January 2028, less $40 million reserved for specific purposes.

During the year ended December 31, 2023, our operating activities generated operating cash inflows of $1.8 billion, as compared to operating cash inflows of $1.0 billion during the year ended December 31, 2022 due to the results of operations described above.

On the acquisition date, our intent was to divest William Hill International, which was held for sale as of the date of the closing of the William Hill Acquisition with such operations reflected within discontinued operations.

On April 22, 2021, we completed the acquisition of William Hill PLC for £2.9 billion , or approximately $3.9 billion .

On September 8, 2021, we entered into an agreement to sell William Hill International to 888 Holdings Plc for approximately £2.2 billion.

In order to manage the risk of changes in the GBP denominated sales price and expected proceeds, the Company entered into foreign exchange forward contracts.

On April 7, 2022, we amended the agreement to sell William Hill International to 888 Holdings Plc for a revised enterprise value of approximately £2.0 billion.

During the year ended December 31, 2022, the Company recorded impairments to assets held for sale of $503 million within discontinued operations based on the revised and final sales prices.

On July 1, 2022, we completed the sale of William Hill International to 888 Holdings Plc and outstanding borrowings under the Bridge Credit Agreement were immediately repaid.

After the repayment of the Bridge Credit Agreement, other permitted leakage, and the settlement of related forward contracts, we received net proceeds of $730 million.

Including open market repurchases and repayments, we utilized all $730 million to reduce our outstanding debt.

On October 5, 2022, we entered into a third amendment to the CEI Credit Agreement (the “Third Amendment”) which provided for an aggregate principal amount of $750 million senior secured term loan (the “CEI Term Loan A” and together with the CEI Revolving Credit Facility, as so amended, the “Amended CEI Revolving Credit Facility,” the “Senior Credit Facilities”) as a new term loan under the credit agreement, increased the aggregate principal amount of the CEI Revolving Credit Facility to $2.25 billion and made certain other amendments to the credit agreement.

Both the Amended CEI Revolving Credit Facility and the CEI Term Loan A mature on January 31, 2028, subject to a springing maturity in the event our certain other long-term debt is not extended or repaid.

The Amended CEI Revolving Credit Facility includes a letter of credit sub-facility of $388 million.

Concurrently with the closing of the Senior Credit Facilities, we terminated the CRC Revolving Credit Facility and utilized the entire proceeds of the CEI Term Loan A of $750 million to make a partial prepayment of the outstanding principal balance of the CRC Term Loan.

On February 6, 2023, the Company issued $2.0 billion in aggregate principal amount of 7.00% senior secured notes (the “CEI Senior Secured Notes due 2030”) pursuant to an indenture by and among the Company, the subsidiary guarantors party thereto from time to time, U.S.

On February 6, 2023, we entered into an Incremental Assumption Agreement No.

2 pursuant to which we incurred a new senior secured term loan facility in an aggregate principal amount of $2.5 billion (the “CEI Term Loan B” and, together with the CEI Term Loan A, the “CEI Term Loans”) as a new term loan under the CEI Credit Agreement.

The CEI Term Loan B requires scheduled quarterly principal payments in amounts equal to 0.25% of the original aggregate principal amount of the CEI Term Loan B, with the balance payable at maturity.

Borrowings under the CEI Term Loan B bear interest, paid monthly, at a rate equal to, at our option, either (a) a forward-looking term rate based on the Adjusted Term SOFR, subject to a floor of 0.50% or (b) a base rate (the “TLB Base Rate”) determined by reference to the highest of (i) the “Prime Rate” in the United States, (ii) the federal funds rate plus 0.50% per annum and (iii) the one-month Adjusted Term SOFR plus 1.00% per annum, in each case, plus an applicable margin.

Such applicable margin is 3.25% per annum in the case of any Adjusted Term SOFR loan and 2.25% per annum in the case of any TLB Base Rate loan, subject to one 0.25% step-down based on our net total leverage ratio.

The CEI Term Loan B was issued at a price of 99.0% of the principal amount and will mature in February 2030.

On February 6, 2023, concurrently with the issuance of the CEI Term Loan B, we issued $2.0 billion in aggregate principal amount of 7.00% senior secured notes (the “CEI Senior Secured Notes due 2030”) pursuant to an indenture by and among the Company, the subsidiary guarantors party thereto from time to time, U.S.

Bank Trust Company, National Association, as trustee, and U.S.

2 unchanged sentences

The CEI Senior Secured Notes due 2030 will mature in February 2030, with interest paid semi-annually on February 15 and August 15 of each year, commencing August 15, 2023.

Additionally, on February 6, 2023, Caesars entered into an Incremental Assumption Agreement No.

2 pursuant to which the Company incurred a new senior secured term loan facility in an aggregate principal amount of $2.5 billion (the “CEI Term Loan B”) as a new term loan under the CEI Credit Agreement.

The Term Loan B requires scheduled quarterly amortization payments in amounts equal to 0.25% of the original aggregate principal amount of the CEI Term Loan B, with the balance payable at maturity.

Borrowings under the CEI Term Loan B bear interest at a rate equal to, at the Company’s option, either (a) a forward-looking term rate based on the secured overnight financing rate for the applicable interest period plus an adjustment of 0.10% per annum (“Adjusted Term SOFR”), subject to a floor of 0.50% or (b) a base rate (the “Base Rate”) determined by reference to the highest of (i) the rate of interest per annum last quoted by The Wall Street Journal as the “Prime Rate” in the United States, (ii) the federal funds rate plus 0.50% per annum and (iii) the one-month Adjusted Term SOFR plus 1.00% per annum, in each case, plus an applicable margin.

Such applicable margin is 3.25% per annum in the case of any Adjusted Term SOFR loan and 2.25% per annum in the case of any Base Rate loan, subject to one 0.25% step-down based on the Company’s net total leverage ratio.

The CEI Term Loan B was issued at a price of 99.0% of the principal amount and will mature in February 2030.

The net proceeds from the issuance of the CEI Senior Secured Notes due 2030 and the net proceeds from the CEI Term Loan B were used to repay the outstanding principal balance, including accrued and unpaid interest, of both the CRC Term Loan and the CRC Incremental Term Loan.

The remaining net proceeds were to be used to pay related fees, or for general corporate use.

Upon the termination of the CRC Term Loan and the CRC Incremental Term Loan, the Company recorded a loss on extinguishment of debt of approximately $200 million.

The net proceeds from the CEI Term Loan B, along with the net proceeds from the issuance of the CEI Senior Secured Notes due 2030 described above, were used to repay the outstanding principal balance, including accrued and unpaid interest, of both the CRC Term Loan and the CRC Incremental Term Loan.

Upon the termination of the CRC Term Loan and the CRC Incremental Term Loan, we recorded a loss on extinguishment of debt of $197 million.

On May 1, 2023, we elected to prepay the outstanding $400 million Convention Center Mortgage Loan utilizing cash on hand.

On July 10, 2023, we completed the acquisition of the remaining 24.2% equity ownership in Horseshoe Baltimore, utilizing cash on hand, for a total of $66 million.

On July 17, 2023, we permanently repaid the outstanding principal balance of the Baltimore Term Loan.

In connection with the repayment, we recognized a $3 million loss on the early extinguishment of debt.

On February 6, 2024, we entered into an Incremental Assumption Agreement No.

3 pursuant to which we incurred a new senior secured incremental term loan in an aggregate principal amount of $2.9 billion (the “CEI Term Loan B-1”) under the CEI Credit Agreement.

The CEI Term Loan B-1 requires quarterly principal payments in amounts equal to 0.25% of the original aggregate principal amount of the CEI Term Loan B-1, with the balance payable at maturity.

Borrowings under the CEI Term Loan B-1 bear interest at a rate equal to, at our option, either (a) a forward-looking term rate based on the Term SOFR, subject to a floor of 0.50% or (b) a base rate (the “TLB-1 Base Rate”) determined by reference to the highest of (i) the “Prime Rate” in the United States, (ii) the federal funds rate plus 0.50% per annum and (iii) the one-month Term SOFR plus 1.00% per annum, in each case, plus an applicable margin.

Such applicable margin is 2.75% per annum in the case of any Term SOFR loan and 1.75% per annum in the case of any TLB-1 Base Rate loan.

The CEI Term Loan B-1 was issued at a price of 99.75% of the principal amount and will mature on February 6, 2031.

Additionally, on February 6, 2024, we issued $1.5 billion in aggregate principal amount of 6.50% senior secured notes due 2032 (the “CEI Senior Secured Notes due 2032”) pursuant to an indenture by and among the Company, the subsidiary guarantors party thereto, U.S.

Bank Trust Company, National Association, as trustee, and U.S.

Bank National Association, as collateral agent.

The CEI Senior Secured Notes due 2032 rank equally with all existing and future first-priority lien obligations of the Company and the subsidiary guarantors.

The CEI Senior Secured Notes due 2032 will mature on February 15, 2032, with interest paid semi-annually on February 15 and August 15 of each year, commencing August 15, 2024.

The net proceeds from the issuance of the CEI Senior Secured Notes due 2032 and the net proceeds from the CEI Term Loan B-1, together with borrowings under the CEI Revolving Credit Facility, were used to tender, redeem, repurchase, defease, and/or satisfy and discharge any and all of the principal amounts, including accrued and unpaid interest, related expenses and fees of both the 5.75% Senior Secured Notes due 2025 (the “CRC Senior Secured Notes”) and the 6.25% Senior Secured Notes due 2025 (the “CEI Senior Secured Notes due 2025”).

As a result of these transactions, we estimate that we will incur approximately $50 million of loss on early extinguishment of debt.

We expect that our primary capital requirements going forward will relate to the expansion and maintenance of our properties, taxes, servicing our outstanding indebtedness, and rent payments under our GLPI Master Lease, the VICI Leases and other leases.

We make capital expenditures and perform continuing refurbishment and maintenance at our properties to maintain our quality standards.

Our capital expenditure requirements for 2023 include expansion projects, the rebranding of certain properties, implementation and migration of states to our Liberty platform and continued investment into new markets with our Caesars Sportsbook and iGaming applications in our Caesars Digital segment.

In addition, we may, from time to time, seek to repurchase our outstanding indebtedness.

Any such purchases may be funded by existing cash balances or the incurrence of debt.

Our capital expenditure requirements for 2024 include expansion projects, hotel renovations and continued investment into new markets with our Caesars Sportsbook and iGaming applications in our Caesars Digital segment.

In addition, we may, from time to time, seek to repurchase or prepay our outstanding indebtedness.

Any such purchases or prepayments may be funded by existing cash balances or the incurrence of debt.

The amount and timing of any repurchase will be based on business and market conditions, capital availability, compliance with debt covenants and other considerations.

We continue to expand into new markets with projects such as our partnership with the Eastern Band of Cherokee Indians to build and develop Caesars Virginia which is estimated to open in late 2024.

The development has a budget of $650 million and is expected to include a premier destination resort casino along with a 500-room hotel and world-class casino floor including 1,300 slot machines, 85 live table games, a WSOP Poker Room, a Caesars Sportsbook, a live entertainment theater and 40,000 square feet of meeting and convention space.

Additionally, Caesars announced plans to expand into Nebraska with the development of a Harrah’s casino and racetrack.

The casino development is expected to feature a new one-mile horse racing surface, a 40,000-square-foot-casino and sportsbook with more than 400 slot machines and 20 table games, as well as a restaurant and retail space.

During the construction of Caesars Virginia and Harrah’s in Nebraska, we anticipate opening and operating temporary facilities during 2023 while the permanent facilities are completed.

In 2020, we funded $400 million to escrow as of the closing of the Merger and have begun to utilize those funds in accordance with a three year capital expenditure plan in the state of New Jersey.

This amount is currently included in restricted cash in Other assets, net.

As of December 31, 2022, our restricted cash balance in the escrow account was $118 million for future capital expenditures in New Jersey.

As a condition of the extension of the casino operating contract and ground lease for Harrah’s New Orleans, we are also required to make a capital investment of $325 million in Harrah’s New Orleans by July 15, 2024.

The capital investment is expected to include a renovation and full interior and exterior redesign, updated casino floor, new culinary experiences and a new 340-room hotel tower as we are also in the process of rebranding the property as Caesars New Orleans.

The project has a current capital plan of approximately $430 million as of December 31, 2022.

Total capital expenditures have been $112 million since the project began.

On August 27, 2020 , Hurricane Laura made landfall on Lake Charles as a Category 4 storm, severely damaged the Isle of Capri Casino Hotel Lake Charles.

During the year ended December 31, 2022, we reached a final settlement agreement with the insurance carriers for a total amount of $128 million, before our insurance deductible of $25 million.

We have received a total of $103 million related to damaged fixed assets, remediation costs and business interruption.

The construction of our new land-based casino Horseshoe Lake Charles was completed and reopened in December 2022.

Cash spent for capital expenditures totaled $952 million, $520 million, $164 million for the years ended December 31, 2022, 2021 and 2020, respectively, related to our growth, renovation, maintenance, and other capital projects.

We have agreements with certain professional sports leagues and teams, sporting event facilities and media companies for tickets, suites, and advertising, marketing, promotional and sponsorship opportunities including communication with partner customer databases.

Additionally, a selection of such partnerships provide us with exclusivity to access the aforementioned rights within the casino and/or sports betting category.

As of December 31, 2023 and 2022 , obligations related to these agreements were $605 million and $898 million, respectively, with contracts extending through 2040.

These obligations include leasing of event suites that are generally considered short term leases for which we do not record a right of use asset or lease liability.

We recognize expenses in the period services are received in accordance with the various agreements.

In addition, assets or liabilities may be recorded related to the timing of payments as required by the respective agreement.

We continue to expand into new markets with projects such as our partnership with the Eastern Band of Cherokee Indians to build and develop Caesars Virginia which is estimated to open a permanent facility in late 2024.

The permanent development has a budget of $650 million and is expected to include a premier destination resort casino along with a 320-room hotel and world-class casino floor including 1,300 slot machines, 85 live table games, a WSOP Poker Room, a Caesars Sportsbook, a live entertainment theater and 40,000 square feet of meeting and convention space.

Additionally, we are developing Harrah’s Columbus Nebraska which is a casino development expected to feature a new one-mile horse racing surface, a 40,000-square-foot-casino and sportsbook with more than 400 slot machines and 20 table games, as well as a restaurant and retail space, with an official opening in the second quarter of 2024.

In the second quarter of 2023, temporary gaming facilities for Caesars Virginia and Harrah’s Columbus Nebraska opened while the permanent facilities are being constructed.

In 2020, we funded $400 million into escrow for a three year capital expenditure plan in the state of New Jersey.

The capital plan included significant room renovations at both Caesars Atlantic City and Harrah’s Atlantic City, as well as the addition of new restaurants with celebrity partners.

During the year ended December 31, 2023, we met our commitment and exhausted the remaining funds in the escrow account.

As a condition of the extension of the casino operating contract and ground lease for Harrah’s New Orleans, we are also required to make a capital investment of $325 million on or around Harrah’s New Orleans by July 15, 2024.

The capital investment involves the rebranding of the property to Caesars New Orleans which includes a renovation and full interior and exterior redesign, an updated casino floor, new culinary experiences and a new 340-room hotel tower.

The project has a current capital plan of approximately $430 million and, as of December 31, 2023, total capital expenditures have been $289 million since the project began.

Cash used for capital expenditures totaled $1.3 billion, $952 million and $520 million for the years ended December 31, 2023, 2022 and 2021, respectively, related to our growth, renovation, maintenance, and other capital projects.

The following table summarizes our estimates for 2024 capital expenditures:

(In millions) Low High

Atlantic City $ 118 $ 118

Indiana racing operations — 10

Total estimated capital expenditures from restricted cash 118 128

Growth and renovation projects $ 325 $ 375

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(a) We expect to receive approximately $200 million from the combination of our temporary casino operations and contributions from our joint venture partners to support the development of Caesars Virginia.

(a) We expect the joint venture to enter into a new credit facility, of approximately $375 million to $425 million, to fund future Caesars Virginia capital expenditures alongside ongoing cash flows from the temporary casino’s operations.

A significant portion of our liquidity needs are for debt service and payments associated with our leases.

Our estimated debt service (including principal and interest) is approximately $1.0 billion for 2023 .

Our estimated debt service (including principal and interest) is approximately $915 million for 2024 .

We also lease certain real property assets from third parties, including VICI and GLPI.

Our leases with VICI are subject to annual escalations based on the Consumer Price Index (“CPI”).

The increase in the CPI over the prior year resulted in an increase in our annual lease payments to VICI, which took effect in November 2022.

The VICI Leases are subject to annual escalations, that take effect in November of each year, based on the CPI.

We estimate our lease payments to VICI and GLPI to be approximately $1.3 billion for 2024 .

We have periodically divested assets to raise capital or, in previous cases, to comply with conditions, terms, obligations or restrictions imposed by antitrust, gaming and other regulatory entities.

In addition to the divestiture of William Hill International, as described above, on May 5, 2022, we consummated the sale of the equity interests of Baton Rouge to CQ Holding Company, Inc.

On April 6, 2021, the Company consummated the sale of the equity interests of MontBleu for $15 million.

The purchase price was collected in April 2022.

If the agreed upon selling price for future divestitures does not exceed the carrying value of the assets, we may be required to record additional impairment charges in future periods which may be material.

We expect that our current liquidity, cash flows from operations, availability of borrowings under committed credit facilities and proceeds from the announced asset sales will be sufficient to fund our operations, capital requirements and service our outstanding indebtedness for the next twelve months.

If an 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, including availability of borrowings under our committed credit facility and cash flows from operations will be sufficient to fund our operations, capital requirements and service our outstanding indebtedness for the next twelve months.

Debt and Master Lease Covenant Compliance

The Senior Credit Facilities, the Baltimore Term Loan, the Baltimore Revolving Credit Facility and the indentures related to the CEI Senior Secured Notes, the CEI Senior Notes due 2027, the CRC Senior Secured Notes and the CEI Senior Notes due 2029 contain covenants which are standard and customary for these types of agreements.

The Senior Credit Facilities, the CEI Term Loan B, and the indentures governing the CRC Senior Secured Notes, the CEI Senior Secured Notes due 2025, the CEI Senior Secured Notes due 2030, the CEI Senior Notes due 2027, and the CEI Senior Notes due 2029 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 Amended CEI Revolving Credit Facility and the CEI Term Loan A include a maximum net total leverage ratio financial covenant of 7.25:1 until December 31, 2024 and 6.50:1 from and after December 31, 2024.

Following the Third Amendment, the Amended CEI Revolving Credit Facility and the CEI Term Loan A include a maximum net total leverage ratio financial covenant of 7.25:1 until December 31, 2024 and 6.50:1 from and after December 31, 2024.

In addition, the Amended CEI Revolving Credit Facility and the CEI Term Loan A include a minimum fixed charge coverage ratio financial covenant of 1.75:1 until December 31, 2024 and 2.0:1 from and after December 31, 2024.

From and after the repayment of the CEI Term Loan A, the financial covenants applicable to the Amended CEI Revolving Credit Facility will be tested solely to the extent that certain testing conditions are satisfied.

The Baltimore Revolving Credit Facility includes a net senior secured leverage ratio financial covenant of 5.0:1.

Failure to comply with such covenants could result in an acceleration of the maturity of indebtedness outstanding under the relevant debt document.

As of December 31, 2023, we were not subject to any debt covenants with respect to the new CEI Term Loan B-1 or the CEI Senior Secured Notes due 2032.

The GLPI Leases and VICI Leases contain certain covenants requiring minimum capital expenditures based on a percentage of net revenues along with maintaining certain financial ratios.

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Share Repurchase Program

On November 8, 2018, our Board of Directors authorized a $150 million common stock repurchase program (the “Share Repurchase Program”) pursuant to which we may, from time to time, repurchase shares of common stock on the open market (either with or without a 10b5-1 plan) or through privately negotiated transactions.

In November 2018, the Board 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, 2022, we have acquired 223,823 shares of common stock under the program at an aggregate value of $9 million and an average of $40.80 per share.

As of December 31, 2023, we have acquired 223,823 shares of common stock 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, 2023 or 2022.

Debt Obligations and Leases

Baltimore Term Loan and Baltimore Revolving Credit Facility

As a result of our increased ownership interest in Horseshoe Baltimore, we began to consolidate the aggregate principal amount of Horseshoe Baltimore’s senior secured term loan facility (the “Baltimore Term Loan”) and amount outstanding, if any, under Horseshoe Baltimore’s senior secured revolving credit facility (the “Baltimore Revolving Credit Facility”).

The Baltimore Term Loan matures in July 2024 and is subject to a variable rate of interest calculated as LIBOR plus 4.00%.

The Baltimore Revolving Credit Facility has borrowing capacity of up to $10 million, subject to a variable rate of interest calculated as Term SOFR plus 4.00% subject to one 0.25% step-down based on senior secured leverage ratio, the ratio of first lien senior secured net debt to Adjusted EBITDA.

On June 24, 2022, we entered into an amendment related to the Baltimore Revolving Credit Facility to extend the maturity date to July 7, 2023.

As of December 31, 2022, there was $10 million of available borrowing capacity under the Baltimore Revolving Credit Facility.

On November 14, 2022, we made partial prepayment of $10 million of the outstanding principal balance of the Baltimore Term Loan.

CRC Term Loans and CRC Revolving Credit Facility

The CRC Term Loan, the CRC Incremental Term Loan and the CRC Revolving Credit Facility were subject to the terms described below prior to termination or repayment.

The CRC Revolving Credit Facility was terminated in October 2022 and on February 6, 2023, the Company repaid the CRC Term Loan and the CRC Incremental Term Loan with proceeds from a new CEI Term Loan B and new CEI Senior Secured Notes, both due 2030.

See “Subsequent Amendment to the CEI Credit Agreement and issuance of New Senior Secured Notes” below.

CRC was party to a credit agreement, dated as of December 22, 2017 (as amended, the “CRC Credit Agreement”), which provided for a $1.0 billion five-year revolving credit facility (the “CRC Revolving Credit Facility”) an initial $4.7 billion seven-year senior secured term loan (the “CRC Term Loan”), and an incremental $1.8 billion five-year senior secured term loan that was incurred in connection with the Merger (the “CRC Incremental Term Loan”).

The CRC Term Loan had a maturity date in December 2024 and the CRC Incremental Term Loan had a maturity date in July 2025.

The CRC Term Loan and the CRC Incremental Term Loan required scheduled quarterly principal payments in amounts equal to 0.25% of the original aggregate principal amount, with the balances due at maturity.

The CRC Credit Agreement also included customary voluntary and mandatory prepayment provisions, subject to certain exceptions.

The CRC Revolving Credit Facility contained a maturity date in December 2022 and included a $400 million letter of credit sub-facility.

Borrowings under the CRC Credit Agreement were subject to interest at a rate equal to either (a) LIBOR adjusted for certain additional costs, subject to a floor of 0% or (b) a base rate determined by reference to the highest of (i) the federal funds rate plus 0.50%, (ii) the prime rate as determined by Credit Suisse AG, Cayman Islands Branch, as administrative agent under the CRC Credit Agreement and (iii) the one-month adjusted LIBOR rate plus 1.00%, in each case plus an applicable margin.

Such applicable margin shall be (a) with respect to the CRC Term Loan, 2.75% per annum in the case of any LIBOR loan or 1.75% per annum in the case of any base rate loan, and (b) with respect to the CRC Incremental Term Loan, 3.50% per annum in the case of any LIBOR loan or 2.50% in the case of any base rate loan.

The CRC Term Loan and the CRC Incremental Term Loan were LIBOR based loans as of December 31, 2022.

During the year ended December 31, 2022, the Company utilized and fully repaid borrowings on the CRC Revolving Credit Facility, prior to its termination.

Additionally, the Company made several partial prepayments of outstanding principal of the CRC Term Loan utilizing operating cash flows totaling $300 million, excluding the prepayments resulting from the proceeds of

the CEI Term Loan A described below, and recognized a related $16 million loss on the early extinguishment of debt during the year ended December 31, 2022.

Following the closing of the sale of William Hill International, we utilized the proceeds from the sale, as well as cash on hand to make partial prepayments totaling $755 million of the outstanding principal of the CRC Incremental Term Loan and recognized a $27 million loss on the early extinguishment of debt during the year ended December 31, 2022.

On October 5, 2022, in connection with the Third Amendment (as defined below) to the CEI Credit Agreement, we utilized the entire proceeds of a new $750 million CEI Term Loan A (as defined below) to make a partial prepayment of the outstanding principal of the CRC Term Loan, as well as terminate the CRC Revolving Credit Facility.

As a result of the partial prepayment, we recognized a $41 million loss on the early extinguishment of debt.

CEI Term Loan A and CEI Revolving Credit Facility

CEI Term Loans and CEI Revolving Credit Facility

CEI is party to a credit agreement, dated as of July 20, 2020, with JPMorgan Chase Bank, N.A., as administrative agent, U.S.

Bank National Association, as collateral agent, and certain banks and other financial institutions and lenders party thereto (the “CEI Credit Agreement”) which provided for a five-year CEI Revolving Credit Facility in an aggregate principal amount of $1.2 billion (the “CEI Revolving Credit Facility”).

The CEI Revolving Credit Facility contained reserves of $190 million which are available only for certain permitted uses.

On May 23, 2022, the Company obtained approval for a reduction of $150 million in required reserves.

Prior to the amendment described below, the CEI Revolving Credit Facility was scheduled to mature in July 2025 and included a letter of credit sub-facility of $250 million.

Prior to the Third Amendment (as defined below) of the CEI Credit Agreement on October 5, 2022, the interest rate per annum applicable under the CEI Revolving Credit Facility, at the Company’s option 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) rate of interest per annum last quoted by The Wall Street Journal as the “Prime Rate” in the United States and (iii) the one-month adjusted LIBOR rate plus 1.00%, in each case plus an applicable margin.

Such applicable margin was 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 net total leverage ratio.

Additionally, prior to the Third Amendment (as defined below) of the CEI Credit Agreement, we were required to pay a commitment fee in respect of any unused commitments under the CEI Revolving Credit Facility in the amount of 0.50% per annum, subject to a step-down to 0.375% per annum based upon the Company’s net total leverage ratio.

We were 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% per annum of the daily stated amount of such letter of credit.

On October 5, 2022, Caesars entered into a Third Amendment to the CEI Credit Agreement pursuant to which the Company (a) incurred a senior secured term loan in an aggregate principal amount of $750 million (the “CEI Term Loan A”) as a new term loan under the credit agreement, (b) amended and extended the CEI Revolving Credit Facility under the CEI Credit Agreement (the CEI Revolving Credit Facility, as so amended, the “Amended CEI Revolving Credit Facility” and, together with the CEI Term Loan A, the “Senior Credit Facilities”), (c) increased the aggregate principal amount of the CEI Revolving Credit Facility to $2.25 billion, and (d) made certain other amendments to the CEI Credit Agreement.

Bank National Association, as collateral agent, and certain banks and other financial institutions and lenders party thereto (the “CEI Credit Agreement”), which, as amended, provides for the CEI Revolving Credit Facility in an aggregate principal amount of $2.25 billion (the “CEI Revolving Credit Facility”).

The CEI Revolving Credit Facility contains reserves of $40 million which are available only for certain permitted uses.

On October 5, 2022, Caesars entered into a third amendment to the CEI Credit Agreement (the “Third Amendment”) pursuant to which we (a) incurred a senior secured term loan in an aggregate principal amount of $750 million (the “CEI Term Loan A”) as a new term loan under the credit agreement, (b) amended and extended the CEI Revolving Credit Facility under the CEI Credit Agreement (the CEI Revolving Credit Facility, as so amended, the “Amended CEI Revolving Credit Facility” and, together with the CEI Term Loan A, the “Senior Credit Facilities”), (c) increased the aggregate principal amount of the CEI Revolving Credit Facility to $2.25 billion, and (d) made certain other amendments to the CEI Credit Agreement.

Both the Amended CEI Revolving Credit Facility and the new CEI Term Loan A mature on January 31, 2028, subject to a springing maturity in the event certain other long-term debt of Caesars is not extended or repaid.

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The CEI Term Loan A requires scheduled quarterly payments in amounts equal to 1.25% of the original aggregate principal amount of the CEI Term Loan A, with the balance payable at maturity.

The Company may make voluntary prepayments of the CEI Term Loan A at any time prior to maturity at par.

Borrowings under the Senior Credit Facilities bear interest at a rate equal to, at the Company’s option, either (a) a forward-looking term rate based on the secured overnight financing rate (“SOFR”) for the applicable interest period plus an adjustment of 0.10% per annum (“Adjusted Term SOFR”), subject to a floor of 0% or (b) a base rate (the “Base Rate”) determined by reference to the highest of (i) the rate of interest per annum last quoted by The Wall Street Journal as the “Prime Rate” in the United States, (ii) the federal funds rate plus 0.50% per annum and (iii) the one-month Adjusted Term SOFR plus 1.00% per annum, in each case, plus an applicable margin.

Such applicable margin is 2.25% per annum in the case of any Adjusted Term SOFR loan and 1.25% per annum in the case of any Base Rate loan, subject to three 0.25% step-downs based on the Company’s net total leverage ratio.

In addition, on a quarterly basis, the Company is required to pay each lender under the Amended CEI Revolving Credit Facility a commitment fee in respect of any unused commitments under the Amended CEI Revolving Credit Facility in the amount of 0.35% per annum of the principal amount of the unused commitments of such lender, subject to three 0.05% step-downs based on the Company’s net total leverage ratio.

As a December 31, 2022, we had $2.1 billion of available borrowing capacity under the Amended CEI Revolving Credit Facility, after consideration of $82 million in outstanding letters of credit, $48 million committed for regulatory purposes and the reserves described above.

We may make voluntary prepayments of the CEI Term Loan A at any time prior to maturity at par.

Borrowings under the Senior Credit Facilities bear interest, paid monthly, at a rate equal to, at our option, either (a) a forward-looking term rate based on Secured Overnight Financing Rate (“Term SOFR”) for the applicable interest period plus an adjustment of 0.10% per annum (“Adjusted Term SOFR”), subject to a floor of 0% or (b) a base rate (the “Base Rate”) determined by reference to the highest of (i) the rate of interest per annum last quoted by The Wall Street Journal as the “Prime Rate” in the United States, (ii) the federal funds rate plus 0.50% per annum and (iii) the one-month Adjusted Term SOFR plus 1.00% per annum, in each case, plus an applicable margin.

Such applicable margin is 2.25% per annum in the case of any Adjusted Term SOFR loan and 1.25% per annum in the case of any Base Rate loan, subject to three 0.25% step-downs based on our net total leverage ratio.

In addition, on a quarterly basis, we are required to pay each lender under the Amended CEI Revolving Credit Facility a commitment fee in respect of any unused commitments under the Amended CEI Revolving Credit Facility in the amount of 0.35% per annum of the principal amount of the unused commitments of such lender, subject to three 0.05% step-downs based on our net total leverage ratio.

On February 6, 2023, Caesars entered into an Incremental Assumption Agreement No.

The CEI Term Loan B requires scheduled quarterly principal payments in amounts equal to 0.25% of the original aggregate principal amount of the CEI Term Loan B, with the balance payable at maturity.

Borrowings under the CEI Term Loan B bear interest, paid monthly, at a rate equal to, at the our option, either (a) a forward-looking term rate based on the Adjusted Term SOFR, subject to a floor of 0.50% or (b) a base rate (the “TLB Base Rate”) determined by reference to the highest of (i) the “Prime Rate” in the United States, (ii) the federal funds rate plus 0.50% per annum and (iii) the one-month Adjusted Term SOFR plus 1.00% per annum, in each case, plus an applicable margin.

The CEI Term Loan B was issued at a price of 99.0% of the principal amount and will mature in February 2030.

The net proceeds from the CEI Term Loan B, along with the net proceeds from the issuance of the CEI Senior Secured Notes due 2030 described below, were used to repay the outstanding principal balance, including accrued and unpaid interest, of both the CRC Term Loan and the CRC Incremental Term Loan.

During the year ended December 31, 2023, we utilized and fully repaid the CEI Revolving Credit Facility.

Such activity is presented in the financing section in the Statements of Cash Flows.

As of December 31, 2023, we had $2.1 billion of available borrowing capacity under the CEI Revolving Credit Facility, after consideration of $70 million in outstanding letters of credit, $46 million committed for regulatory purposes and the reserves described above.

Subsequent Amendment to the CEI Credit Agreement and issuance of New Senior Secured Notes

On February 6, 2023, the Company issued new $2.0 billion in aggregate principal amount of 7.00% senior secured notes (the “CEI Senior Secured Notes due 2030”) pursuant to an indenture by and among the Company, the subsidiary guarantors party thereto from time to time, U.S.

On February 6, 2024, we entered into an Incremental Assumption Agreement No.

3 pursuant to which we incurred a new senior secured incremental term loan in an aggregate principal amount of $2.9 billion (the “CEI Term Loan B-1”) under the CEI Credit Agreement.

The CEI Term Loan B-1 requires quarterly principal payments in amounts equal to 0.25% of the original aggregate principal amount of the CEI Term Loan B-1, with the balance payable at maturity.

Such applicable margin is 2.75% per annum in the case of any Term SOFR loan and 1.75% per annum in the case of any TLB-1 Base Rate loan.

The CEI Term Loan B-1 was issued at a price of 99.75% of the principal amount and will mature on February 6, 2031.

Additionally, on February 6, 2024, we issued $1.5 billion in aggregate principal amount of 6.50% of senior secured notes due 2032 (the “CEI Senior Secured Notes due 2032”) pursuant to an indenture by and among the Company, the subsidiary guarantors party thereto, U.S.

Bank Trust Company, National Association, as trustee, and U.S.

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The CEI Senior Secured Notes due 2032 rank equally with all existing and future first-priority lien obligations of the Company and the subsidiary guarantors.

The CEI Senior Secured Notes due 2030 will mature in February 2030, with interest paid semi-annually on February 15 and August 15 of each year, commencing August 15, 2023.

Additionally, on February 6, 2023, Caesars entered into an Incremental Assumption Agreement No.

The CEI Term Loan B was issued at a price of 99.0% of the principal amount and will mature in February 2030.

Interest under the CEI Term Loan B is based on the forward looking SOFR plus an adjustment of 0.10%, subject to a floor of 0.50%, plus an applicable margin of 3.25% which is subject to one 0.25% step-down based on the Company’s net total leverage ratio.

The net proceeds from the issuance of the CEI Senior Secured Notes due 2030 and the net proceeds from the CEI Term Loan B, were used to repay the outstanding principal balance, including accrued and unpaid interest, of both the CRC Term Loan and the CRC Incremental Term Loan.

The remaining net proceeds were to be used to pay related fees, or for general corporate use.

Upon the termination of the CRC Term Loan and the CRC Incremental Term Loan, the Company recorded a loss on extinguishment of debt of approximately $200 million.

The CEI Senior Secured Notes due 2032 will mature on February 15, 2032, with interest paid semi-annually on February 15 and August 15 of each year, commencing August 15, 2024.

As a result of these transactions, we estimate that it will incur approximately $50 million of loss on early extinguishment of debt.

CRC Senior Secured Notes due 2025

On July 6, 2020, Colt Merger Sub, Inc.

(the “Escrow Issuer”) issued $1.0 billion in aggregate principal amount of 5.75% Senior Secured Notes due 2025 pursuant to an indenture, dated July 6, 2020 (the “CRC Senior Secured Notes”), by and among the Escrow Issuer, U.S.

(the “Escrow Issuer”) issued $1.0 billion in aggregate principal amount of the CRC Senior Secured Notes pursuant to an indenture, dated July 6, 2020, by and among the Escrow Issuer, U.S.

Bank National Association, as trustee and Credit Suisse AG, Cayman Islands Branch, as collateral agent.

In connection with the consummation of the Merger, CRC assumed the rights and obligations under the CRC Senior Secured Notes and the indenture governing such notes.

The CRC Senior Secured Notes rank equally with all existing and future first priority lien obligations of CRC, CRC Finco, Inc.

The CRC Senior Secured Notes ranked equally with all existing and future first priority lien obligations of CRC, CRC Finco, Inc.

and the subsidiary guarantors.

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.

During the year ended December 31, 2022, we purchased a total of $11 million in principal amount of the CRC Senior Secured Notes.

The CRC Senior Secured Notes were set to mature on July 1, 2025 with interest payable semi-annually in cash in arrears on January 1 and July 1 of each year.

On February 16, 2024, we completed the tender and/or redemption of the CRC Senior Secured Notes with proceeds from a new CEI Term Loan B-1, new CEI Senior Secured Notes due 2032, and borrowings under the CEI Revolving Credit Facility, as needed.

See “Subsequent Amendment to the CEI Credit Agreement and issuance of New Senior Secured Notes” above.

CEI Senior Secured Notes due 2025

On July 6, 2020, the Escrow Issuer issued $3.4 billion in aggregate principal amount of 6.25% Senior Secured Notes due 2025 pursuant to an indenture dated July 6, 2020 (the “CEI Senior Secured Notes”), by and among the Escrow Issuer, U.S.

On July 6, 2020, the Escrow Issuer issued $3.4 billion in aggregate principal amount of the CEI Senior Secured Notes due 2025 pursuant to an indenture, dated July 6, 2020, by and among the Escrow Issuer, U.S.

Bank National Association, as trustee, and U.S.

Bank National Association, as collateral agent.

The Company assumed the rights and obligations under the CEI Senior Secured Notes and the indenture governing such notes on July 20, 2020.

The CEI Senior Secured Notes rank equally with all existing and future first-priority lien obligations of the Company and the subsidiary guarantors.

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.

The CEI Senior Secured Notes due 2025 ranked equally with all existing and future first-priority lien obligations of the Company and the subsidiary guarantors.

The CEI Senior Secured Notes due 2025 were set to mature on July 1, 2025 with interest payable semi-annually in cash in arrears on January 1 and July 1 of each year.

On April 5, 2023, we purchased $1 million in principal amount of the CEI Senior Secured Notes due 2025.

On February 7, 2024, we completed the tender, redemption, and/or satisfaction and discharge of the CEI Senior Secured Notes due 2025 with proceeds from a new CEI Term Loan B-1, new CEI Senior Secured Notes due 2032, and borrowings under the CEI Revolving Credit Facility, as needed.

See “Subsequent Amendment to the CEI Credit Agreement and issuance of New Senior Secured Notes” above.

CEI Senior Secured Notes due 2030

Bank Trust Company, National Association, as trustee, and U.S.

Bank National Association, as collateral agent.

The CEI Senior Secured Notes due 2030 rank equally with all existing and future first-priority lien obligations of the Company and the subsidiary guarantors.

The CEI Senior Secured Notes due 2030 will mature in February 2030, with interest paid semi-annually on February 15 and August 15 of each year, commencing August 15, 2023.

Baltimore Term Loan and Baltimore Revolving Credit Facility

On July 17, 2023, following the acquisition of the remaining 24.2% equity interest in Horseshoe Baltimore, we permanently repaid the outstanding principal balance of Horseshoe Baltimore’s senior secured term loan facility (the “Baltimore Term Loan”).

In connection with the repayment, we recognized a $3 million loss on the early extinguishment of debt.

The Baltimore Term Loan was subject to a variable rate of interest calculated as London Interbank Offered Rate (“LIBOR”) plus 4.00% until May 1, 2023, when the Baltimore Term Loan’s benchmark interest rate was amended from LIBOR to the Adjusted Term SOFR plus an applicable adjustment.

In addition, Horseshoe Baltimore’s senior secured revolving credit facility (the “Baltimore Revolving Credit Facility”) matured on July 7, 2023.

The Baltimore Revolving Credit Facility had borrowing capacity of up to $10 million, subject to a variable rate of interest calculated as Term SOFR plus 4.00%.

Convention Center Mortgage Loan

On September 18, 2020, we entered into a loan agreement with VICI, to borrow a 5-year, $400 million Forum Convention Center mortgage loan (the “Mortgage Loan”).

The Mortgage Loan bears interest at a rate of, initially, 7.7% per annum, which escalates annually on the anniversary of the closing date to a maximum interest rate of 8.3% per annum.

The Mortgage Loan bears interest at a rate of, initially, 7.7% per annum, which was set to escalate annually on the anniversary of the closing date up to a maximum interest rate of 8.3% per annum.

On May 1, 2023, we elected to prepay the outstanding $400 million Mortgage Loan utilizing cash on hand.

In connection with the repayment, we extended VICI’s call right relating to the CAESARS FORUM convention center from December 31, 2026 to December 31, 2028.

CRC Term Loan and CRC Incremental Term Loan

Caesars Resort Collection (“CRC”) was party to a credit agreement, dated as of December 22, 2017 (as amended, the “CRC Credit Agreement”), which provided for, among other things, an initial $4.7 billion seven-year senior secured term loan (the “CRC Term Loan”), and an incremental $1.8 billion five-year senior secured term loan (the “CRC Incremental Term Loan”).

The CRC Term Loan and the CRC Incremental Term Loan were subject to the terms described below prior to repayment.

We repaid the $3.4 billion outstanding principal amount of the CRC Term Loan and the $1.0 billion outstanding principal amount of the CRC Incremental Term Loan on February 6, 2023, with proceeds from a new CEI Term Loan B and new CEI Senior Secured Notes due 2030, both of which are described above.

Upon the termination of the CRC Term Loan and the CRC Incremental Term Loan, we recorded a loss on extinguishment of debt of $197 million.

Such applicable margin was (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 and (b) with respect to the CRC Incremental Term Loan, 3.50% per annum in the case of any LIBOR loan or 2.50% in the case of any base rate loan.

CEI Senior Notes due 2027

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Bank National Association, as trustee.

We assumed the rights and obligations under the CEI Senior Notes due 2027 and the indenture governing such notes on July 20, 2020.

The CEI Senior Notes due 2027 rank equally with all existing and future senior unsecured indebtedness of the Company and the subsidiary guarantors.

The CEI Senior Notes due 2027 will mature on July 1, 2027 with interest payable semi-annually in cash in arrears on January 1 and July 1 of each year.

During the year ended December 31, 2022, we purchased a total of $89 million in principal amount of the CEI Senior Notes due 2027.

CEI Senior Notes due 2029

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

Bank National Association, as trustee.

The CEI Senior Notes due 2029 rank equally with all existing and future senior unsecured indebtedness of the Company and the subsidiary guarantors.

The CEI Senior Notes due 2029 will mature on October 15, 2029 with interest payable on April 15 and October 15 of each year, which began on April 15, 2022.

The CEI Senior Notes due 2029 will mature on October 15, 2029 with interest payable on April 15 and October 15 of each year.

CEI leases certain real property assets from VICI under the following agreements:

(i) for a portfolio of properties located throughout the United States (the “Regional Lease”), (ii) for Caesars Palace Las Vegas and Harrah’s Las Vegas (the “Las Vegas Lease”), and (iii) for Harrah’s Joliet Hotel & Casino (the “Joliet Lease”).

The lease agreements, inclusive of all amendments, include (i) a 15-year initial term with four five-year renewal options, (ii) annual fixed rent payments of $1.1 billion, subject to annual escalation provisions based on the CPI and a 2% floor commencing in lease year two of the initial term and (iii) a variable element based on net revenues of the underlying leased properties, commencing in lease year eight of the initial term.

The Regional Lease includes a put-call option whereby the Company may require VICI to purchase and lease back (as lessor) or whereby VICI may require the Company to sell to VICI and lease back (as lessee) the real estate components of the gaming and racetrack facilities of Harrah’s Hoosier Park Racing & Casino and Indiana Grand (“Centaur properties”).

The lease agreements, inclusive of all amendments, include (i) a 15-year initial term with four five-year renewal options, (ii) initial annual fixed rent payments of $1.1 billion, subject to annual escalation provisions based on the CPI and a 2% floor which commenced in lease year two of the initial terms and (iii) a variable element based on net revenues of the underlying leased properties, commencing in lease year eight of the initial term.

The Regional Lease includes a Put-Call Right Agreement whereby we may require VICI to purchase and lease back (as lessor) or whereby VICI may require us to sell to VICI and lease back (as lessee) the real estate components of the gaming and racetrack facilities of Harrah’s Hoosier Park Racing & Casino and Horseshoe Indianapolis (the “Centaur properties”).

Election to exercise the option by either party must be made during the election period beginning January 1, 2022 and ending December 31, 2024.

Upon either party exercising their option, the Centaur properties would be sold at a price in accordance with the agreement and leased back to CEI in accordance to the pre-existing terms of the Regional Lease.

Upon either party exercising their option, the Centaur properties would be sold at a price and leased back to CEI in accordance to the terms and conditions of the Put-Call Right Agreement.

Our VICI Leases are accounted for as a financing obligation and totaled $11.4 billion as of December 31, 2023.

See Note 10 to our Financial Statements for additional information about our VICI Leases and related matters.

The GLPI Master Lease, encompassing a portfolio of properties within the United States, provides for the lease of land, buildings, structures and other improvements on the land (including barges and riverboats), easements and similar appurtenances to the land and improvements relating to the operation of the leased properties.

The GLPI Master Lease, inclusive of all amendments, provides for (i) an initial term of 20 years (through September 2038), with four five-year renewals at the Company’s option, (ii) annual land and building base rent of $24 million and $63 million, (iii) escalating provisions of building base rent equal to 101.25% of the rent for the preceding year for lease years five and six, 101.75% for lease years seven and eight and 102% for each lease year thereafter and (iv) relief from the operating, capital expenditure and financial covenants in the event of involuntary closures.

The Lumière Lease was entered into by the Company and GLPI, whereby the Company sold the real estate underlying Horseshoe St.

The GLPI Master Lease, encompassing a portfolio of properties within the United States, provides for the lease of land, buildings, structures and other improvements on the land, easements and similar appurtenances to the land and improvements relating to the operation of the leased properties.

The GLPI Master Lease, inclusive of all amendments, provides for (i) an initial term of 20 years (through September 2038), with four five-year renewals at the our option, (ii) annual land and building base rent of $24 million and $63 million, respectively, (iii) escalating provisions of building base rent equal to 101.25% of the rent for the preceding year for lease years five and six, 101.75% for lease years seven and eight and 102% for each lease year thereafter and (iv) relief from the operating, capital expenditure and financial covenants in the event of involuntary closures.

The GLPI Master Lease does not provide us with an option to purchase the leased property or the ability to terminate its obligations under the GLPI Master Lease prior to its expiration without GLPI’s consent.

On May 5, 2022, we consummated the sale of the equity interests of Baton Rouge.

On November 13, 2023, a third amendment to the GLPI Master Lease was entered into as a result of the sale and removal of Baton Rouge from the properties included under the GLPI Master Lease.

The Lumière Lease was entered into by us and GLPI, whereby we sold the real estate underlying Horseshoe St.

Louis, formerly known as Lumière, to GLPI and leased back the property under a long-term financing obligation.

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Legal Proceedings ” and Note 11 to our Financial Statements, both of which are included elsewhere in this Annual Report on Form 10-K.

In addition, new competition among retail and online operations may have a material adverse effect on our revenues and could have a similar adverse effect on our liquidity.

See “ Part I, Item 1A.

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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, income taxes, goodwill and indefinite lived intangible assets, long-lived 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.

Certain of our accounting policies, including those in connection with income taxes, goodwill and indefinite lived intangible assets, long-lived 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:

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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, William Hill PLC, and our additional interest in Horseshoe Baltimore.

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 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.

Acquired trademarks, developed technology and Caesars Rewards were valued using the relief from royalty method, which presumes that without ownership of such trademarks, technology, or loyalty program, we would have to make a stream of payments to a third party in return for the right to use their name, technology, 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, technology, 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 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 were 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 was 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.

Reacquired rights were valued using the excess earnings method that reflects the present value of the future profit William Hill expected to earn over the remaining term of the contract, adjusted for returns of other assets that contribute to the generation of this profit, such as working capital, fixed assets and other intangible assets.

The forecasted profit used within the valuation was adjusted for the settlement of the preexisting relationship as a component of the purchase consideration.

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.

Assets and liabilities which are designated as held for sale on an acquisition date are also measured at fair value, utilizing similar market, income and cost approaches described above, based on the underlying asset class held for sale.

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 may be beyond our control.

We and our subsidiaries file income tax returns with federal, state and foreign jurisdictions.

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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.

As of December 31, 2022, the Company had federal and state net operating loss carryforwards of $1.9 billion and $9.2 billion, respectively and federal general business tax credit and research tax credit carryforwards of $129 million, which will expire on various dates as follows:

Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use existing deferred tax assets.

We are still carrying a valuation allowance on certain federal and state deferred tax assets that are not more likely than not to be realized in the future.

We have assessed the changes to the valuation allowance, including realization of the disallowed interest expense deferred tax asset, using the integrated approach.

As of December 31, 2023, the Company had federal and state net operating loss carryforwards of $872 million and $9.0 billion, respectively, and federal general business tax credit and research tax credit carryforwards of $145 million, which will expire on various dates as follows:

Year of Expiration Net Operating Losses Tax Credits

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$ 872 $ 9,033 $ 145

As of December 31, 2022, total federal and state deferred tax assets are $4.2 billion of which we believe it is more likely than not that a portion of the associated benefit will not be realized and, as a result, we have provided for a valuation allowance of $1.8 billion.

However, we have recently observed positive trends in our operating results and if these trends continue, in the foreseeable future we may determine that we will be able to realize a significant portion of these deferred tax assets.

A future reversal of the valuation allowance on our deferred tax assets could result in an income tax benefit of $0.9 billion to $1.2 billion.

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.

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.

Goodwill and Other Indefinite-lived Intangible Assets

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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 to assess future effects of COVID-19 as well as the realization of synergies anticipated from acquisitions which may not be realized at the projected rate.

Assumptions include those used to assess effects of changes in the competitive environment, capital projects and new developments which may not be realized at the projected rate.

We completed our annual impairment tests as of October 1, 2023.

The estimated fair values of certain of our indefinite lived intangible assets and reporting units decreased primarily due to an increase in the related discount rates, which represents the higher required cost of capital as a result of the macroeconomic environment and projected outlook.

Accordingly, we identified one reporting unit with which the estimated fair value of the associated gaming rights was less than the carrying value and we recorded an impairment of $30 million.

In addition, we identified two reporting units with which the estimated fair value of the respective reporting unit was below the carrying value and we recorded a total impairment of $78 million to goodwill.

These reporting units are all within the Regional segment.

As of October 1, 2022, one reporting unit in the Las Vegas segment and four reporting units in the Regional segment with goodwill totaling $625 million and $1.1 billion, respectively, had fair values that did not significantly exceed their respective

carrying values.

In addition, we identified trademarks totaling $286 million in the Las Vegas segment, $180 million in the Caesars Digital segment, and gaming rights totaling $173 million in the Regional segment that do not significantly exceed their respective carrying values.

The estimated fair values of certain of our indefinite lived intangible assets and reporting units decreased primarily due to a decrease in projected future cash flows at certain regional properties due to increased competition.

Accordingly, we identified one reporting unit with which the estimated fair value of the associated gaming rights was less than the carrying value and recorded an impairment of $81 million.

In addition, we identified one reporting unit where the estimated fair value of the respective reporting unit was below the carrying value and recorded a total impairment of $14 million to goodwill.

These reporting units are within the Regional segment.

As of October 1, 2023, three reporting units in the Regional segment with goodwill totaling $1.1 billion had fair values that did not significantly exceed their respective carrying values.

In addition, we identified a trademark totaling $114 million in the Las Vegas segment and a gaming right totaling $91 million in the Regional segment that do not significantly exceed their respective carrying values.

The reporting units and indefinite lived intangible assets with carrying values that do not significantly exceed their estimated fair values are primarily assets acquired in the Merger when our discount rate was approximately 9.5%.

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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.

The discount rate represents the most sensitive input in our estimates and an increase of 1% to the discount rate would result in additional impairments of approximately $125 million on the assets that do not significantly exceed their carrying values.

In addition, $468 million of goodwill within our Regional segment is associated with reporting units with zero or negative carrying value.

The discount rate represents the most sensitive input in our estimates and an increase of 1% to the discount rate would result in impairments of approximately $40 million on the assets that do not significantly exceed their carrying values.

In addition, $1.0 billion of goodwill within our Regional segment is associated with reporting units with zero or negative carrying values.

See Note 7 for additional information.

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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, workers’ compensations and general liability claims are included self-insurance claims and reserves within Accrued other liabilities on the Balance Sheets.

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

Self-insurance reserves for employee medical claims, workers’ compensations and general liability claims are included within Accrued other liabilities on the Balance Sheets.

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.

Litigation, Claims and Assessments

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis