Segment Information

9 Months Ended

Sep. 30, 2020

. Segment InformationThe executive decision maker of the Company reviews operating results, assesses performance and makes decisions on a “significant market” basis. Management views each of the Company’s casinos as an operating segment. Operating segments are aggregated based on their similar economic characteristics, types of customers, types of services and products provided, and their management and reporting structure. Prior to the Merger, our principal operating activities occurred in five geographic regions and reportable segments: West, Midwest, South, East and Central. Following the Merger, the Company’s principal operating activities occur in three regionally-focused and reportable segments. The reportable segments are based on the similar

characteristics of the operating segments within the regions in which they operate: (1) Las Vegas, (2) Regional, and (3) Managed, International, CIE, in addition to Corporate and Other. See table below for a summary of these segments. Also, see Note 4 and Note 7 for a discussion of the impairment of intangibles and long-lived assets related to certain segments.

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

Las Vegas

Regional

Managed, International, CIE

(a)

Bally’s Las Vegas

Eldorado Resort Casino Reno

(a)

Harrah’s Atlantic City

International

(a)

The Cromwell

Silver Legacy Resort Casino

(a)

Harrah’s Laughlin

(a)

Caesars Cairo

(a)

Flamingo Las Vegas

Circus Circus Reno

(a)

Harrah’s New Orleans

(a)

Ramses Casino

(a)

The LINQ Hotel & Casino

MontBleu Casino Resort & Spa (c)

(a)

Hoosier Park (f)

(a)

Emerald Casino Resort (b)

(a)

Paris Las Vegas

Tropicana Laughlin Hotel & Casino

(a)

Indiana Grand (g)

(a)

Alea Glasgow (b)

(a)

Planet Hollywood Resort & Casino

Isle Casino Hotel - Blackhawk

(a)

Bally’s Atlantic City (b)

(a)

Alea Nottingham (b)

(a)

Caesars Palace Las Vegas

Lady Luck Casino - Black Hawk

(a)

Caesars Atlantic City

(a)

The Empire Casino (b)

(a)

Harrah’s Las Vegas

Isle Casino Waterloo

(a)

Caesars Southern Indiana (e)(b)

(a)

Manchester235 (b)

(a)

Rio All-Suite Hotel & Casino

Isle Casino Bettendorf

(a)

Harrah’s Council Bluffs

(a)

Playboy Club London (b)

Isle of Capri Casino Boonville

(a)

Harrah’s Gulf Coast

(a)

Rendezvous Brighton (b)

Isle of Capri Casino Kansas City (d)

(a)

Harrah’s Joliet

(a)

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

Isle Casino Racing Pompano Park

(a)

Harrah’s Lake Tahoe

(a)

The Sportsman (b)

Eldorado Resort Casino Shreveport (c)

(a)

Harrah’s Louisiana Downs (h)(b)

Managed

Isle of Capri Casino Hotel Lake Charles

(a)

Harrah’s Metropolis

(a)

Harrah’s Ak-Chin

Belle of Baton Rouge Casino & Hotel

(a)

Harrah’s North Kansas City

(a)

Harrah’s Cherokee

Isle of Capri Casino Lula

(a)

Harrah’s Philadelphia

(a)

Harrah’s Cherokee Valley River

Lady Luck Casino Vicksburg (d)

(a)

Harrah’s Reno (i)(b)

(a)

Harrah’s Resort Southern California

Trop Casino Greenville

(a)

Harveys Lake Tahoe

(a)

Horseshoe Baltimore (k)

Eldorado Gaming Scioto Downs

(a)

Horseshoe Bossier City

(a)

Caesars Windsor

Tropicana Casino and Resort, Atlantic City

(a)

Horseshoe Council Bluffs

(a)

Kings & Queens Casino

Grand Victoria Casino

(a)

Horseshoe Hammond (e)(b)

(a)

Caesars Dubai

Lumière Place Casino

(a)

Horseshoe Tunica

CIE

Tropicana Evansville (e)

(a)

Caesars Interactive Entertainment

___________________

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

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

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

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

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

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

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

(h)On September 3, 2020, the Company entered into an agreement to sell Harrah’s Louisiana Downs, which is expected to close in the first half of 2021.

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

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

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

In addition to our properties listed above, other domestic and international properties, including Harrah’s Northern California, are authorized to use the brands and marks of Caesars Entertainment, Inc. We also own the CAESARS FORUM conference

center, which is a 550,000 sq. ft. conference center with 300,000 sq. ft. of flexible meeting space and two of the largest pillarless ballrooms.

“Corporate and Other” includes parent other adjustments and eliminations to reconcile to consolidated Caesars results.

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


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2020		2019		2020		2019
Revenues and expenses
Las Vegas:
Net revenues	$	304	$	—	$	304	$	—
Net loss attributable to Caesars	(162)		—		(162)		—
Adjusted EBITDA	43		—		43		—


Regional:
Net revenues	1,000		661		1,596		1,930
Net (loss) income attributable to Caesars	47		117		(175)		300
Adjusted EBITDA	331		205		439		569


Managed, International, CIE:
Net revenues	69		—		69		—
Net income attributable to Caesars	3		—		3		—
Adjusted EBITDA	18		—		18		—


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


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

Adjusted EBITDA - By Segment

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

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

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


	Three Months Ended September 30, 2020
(In millions)	Las Vegas		Regional		Managed, International, CIE		Corporate and Other		Total
Net (loss) income attributable to Caesars	$	(162)	$	47	$	3	$	(814)	$	(926)
Net income attributable to noncontrolling interests	—		1		—		—		1
Net (income) loss from discontinued operations	—		(9)		10		—		1
Interest expense, net	92		157		—		224		473
Provision for income taxes (a)	—		—		—		135		135
Other loss (b)	—		—		—		164		164

Depreciation and amortization	91		117		—		15		223
Stock-based compensation	3		4		—		38		45
Transaction costs and other operating costs (c)	19		7		5		188		219
Other items (d)	—		7		—		9		16
Adjusted EBITDA	$	43	$	331	$	18	$	(41)	$	351


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


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


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

____________________

(a)Taxes are recorded at the consolidated level and not estimated or recorded to our Las Vegas, Regional, and Managed, International, CIE segments.

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

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

(d)Other items represent internal labor charges related to certain departed executives, retention bonuses, business optimization expenses and contract labor.


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

___________________

(a)Includes $4 million of capital expenditures related to properties classified as discontinued operations.


	Balance Sheet as of
(In millions)	September 30, 2020		December 31, 2019
Total Assets
Las Vegas	$	21,552	$	—
Regional	14,096		6,787
Managed, International, CIE	604		—
Corporate and Other	(13)		(1,146)
Total	$	36,239	$	5,641