UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2023

OR

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

For the transition period from                to                 

Commission File No. 001-36629

CAESARS ENTERTAINMENT, INC.

(Exact name of registrant as specified in its charter)

Delaware	46-3657681
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

100 West Liberty Street, 12th Floor, Reno, Nevada 89501

(Address and zip code of principal executive offices)

(775) 328-0100

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.00001 par value	CZR	NASDAQ Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

The number of shares of the Registrant’s Common Stock, $0.00001 par value per share, outstanding as of July 27, 2023 was 215,289,873.

CAESARS ENTERTAINMENT, INC.

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION		2
Item 1.	Unaudited Financial Statements	2
	Consolidated Condensed Balance Sheets	2
	Consolidated Condensed Statements of Operations	3
	Consolidated Condensed Statements of Comprehensive Income (Loss)	4
	Consolidated Condensed Statements of Stockholders’ Equity	5
	Consolidated Condensed Statements of Cash Flows	6
	Notes to Consolidated Condensed Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44
Item 4.	Controls and Procedures	44
PART II. OTHER INFORMATION		45
Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	46
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	46
Item 3.	Defaults Upon Senior Securities	46
Item 4.	Mine Safety Disclosures	46
Item 5.	Other Information	46
Item 6.	Exhibits	47
Signatures		48

PART I - FINANCIAL INFORMATION

Item 1.  Unaudited Financial Statements

CAESARS ENTERTAINMENT, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(UNAUDITED)

(In millions)	June 30, 2023		December 31, 2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	1,122	$	1,038
Restricted cash	126		131
Accounts receivable, net	526		611
Inventories	53		59
Prepayments and other current assets	300		263
Total current assets	2,127		2,102
Investments in and advances to unconsolidated affiliates	91		94
Property and equipment, net	14,633		14,598
Goodwill	11,004		11,004
Intangible assets other than goodwill	4,661		4,714
Deferred tax asset	46		—
Other assets, net	916		1,015
Total assets	$	33,478	$	33,527
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	299	$	314
Accrued interest	369		318
Accrued other liabilities	1,981		1,928
Current portion of long-term debt	68		108
Total current liabilities	2,717		2,668
Long-term financing obligations	12,686		12,610
Long-term debt	12,480		12,659
Deferred tax liability	68		987
Other long-term liabilities	860		852
Total liabilities	28,811		29,776
Commitments and contingencies (Note 7)
STOCKHOLDERS’ EQUITY:
Caesars stockholders’ equity	4,545		3,713
Noncontrolling interests	122		38
Total stockholders’ equity	4,667		3,751
Total liabilities and stockholders’ equity	$	33,478	$	33,527

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

2

CAESARS ENTERTAINMENT, INC.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three Months Ended June 30,				Six Months Ended June 30,
(In millions, except per share data)	2023		2022		2023		2022
REVENUES:
Casino	$	1,584	$	1,549	$	3,169	$	2,841
Food and beverage	435		422		862		761
Hotel	525		519		1,028		902
Other	335		331		650		609
Net revenues	2,879		2,821		5,709		5,113
EXPENSES:
Casino	817		825		1,645		1,889
Food and beverage	258		242		509		444
Hotel	143		134		280		249
Other	111		105		218		193
General and administrative	499		517		1,008		1,016
Corporate	86		76		165		145
Depreciation and amortization	323		306		623		606
Transaction and other costs, net	33		14		49		(21)
Total operating expenses	2,270		2,219		4,497		4,521
Operating income	609		602		1,212		592
OTHER EXPENSE:
Interest expense, net	(586)		(559)		(1,180)		(1,111)
Loss on extinguishment of debt	—		—		(197)		—
Other income	3		45		6		49
Total other expense	(583)		(514)		(1,371)		(1,062)
Income (loss) from continuing operations before income taxes	26		88		(159)		(470)
Benefit (provision) for income taxes	902		(52)		951		55
Income (loss) from continuing operations, net of income taxes	928		36		792		(415)
Discontinued operations, net of income taxes	—		(157)		—		(386)
Net income (loss)	928		(121)		792		(801)
Net income attributable to noncontrolling interests	(8)		(2)		(8)		(2)
Net income (loss) attributable to Caesars	$	920	$	(123)	$	784	$	(803)
Net income (loss) per share - basic and diluted:
Basic income (loss) per share from continuing operations	$	4.27	$	0.16	$	3.65	$	(1.95)
Basic loss per share from discontinued operations	—		(0.73)		—		(1.80)
Basic income (loss) per share	$	4.27	$	(0.57)	$	3.65	$	(3.75)
Diluted income (loss) per share from continuing operations	$	4.26	$	0.16	$	3.63	$	(1.95)
Diluted loss per share from discontinued operations	—		(0.73)		—		(1.80)
Diluted income (loss) per share	$	4.26	$	(0.57)	$	3.63	$	(3.75)
Weighted average basic shares outstanding	215		214		215		214
Weighted average diluted shares outstanding	216		215		216		214

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

3

CAESARS ENTERTAINMENT, INC.

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2023		2022		2023		2022
Net income (loss)	$	928	$	(121)	$	792	$	(801)
Foreign currency translation adjustments	(1)		(44)		1		(77)
Change in fair market value of interest rate swaps, net of tax	—		7		—		20
Other	1		1		5		1
Other comprehensive income (loss), net of tax	—		(36)		6		(56)
Comprehensive income (loss)	928		(157)		798		(857)
Comprehensive income attributable to noncontrolling interests	(8)		(2)		(8)		(2)
Comprehensive income (loss) attributable to Caesars	$	920	$	(159)	$	790	$	(859)

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

4

CAESARS ENTERTAINMENT, INC.

CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

	Caesars Stockholders’ Equity
	Preferred Stock			Common Stock									Treasury Stock
(In millions)	Shares	Amount		Shares	Amount		Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Amount		Noncontrolling Interests		Total Stockholders’ Equity
Balance, December 31, 2021	—	$	—	214	$	—	$	6,877	$	(2,410)	$	36	$	(23)	$	61	$	4,541
Stock-based compensation	—	—		—	—		25		—		—		—		—		25
Net loss	—	—		—	—		—		(680)		—		—		—		(680)
Other comprehensive loss, net of tax	—	—		—	—		—		—		(20)		—		—		(20)
Shares withheld related to net share settlement of stock awards	—	—		—	—		(20)		—		—		—		—		(20)
Balance, March 31, 2022	—	$	—	214	$	—	$	6,882	$	(3,090)	$	16	$	(23)	$	61	$	3,846
Stock-based compensation	—	—		—	—		26		—		—		—		—		26
Net income (loss)	—	—		—	—		—		(123)		—		—		2		(121)
Other comprehensive loss, net of tax	—	—		—	—		—		—		(36)		—		—		(36)
Shares withheld related to net share settlement of stock awards	—	—		—	—		(3)		—		—		—		—		(3)
Transactions with noncontrolling interests	—	—		—	—		—		—		—		—		(1)		(1)
Balance, June 30, 2022	—	$	—	214	$	—	$	6,905	$	(3,213)	$	(20)	$	(23)	$	62	$	3,711
Balance, December 31, 2022	—	$	—	215	$	—	$	6,953	$	(3,309)	$	92	$	(23)	$	38	$	3,751
Stock-based compensation	—	—		—	—		27		—		—		—		—		27
Net loss	—	—		—	—		—		(136)		—		—		—		(136)
Other comprehensive income, net of tax	—	—		—	—		—		—		6		—		—		6
Shares withheld related to net share settlement of stock awards	—	—		—	—		(13)		—		—		—		—		(13)
Balance, March 31, 2023	—	$	—	215	$	—	$	6,967	$	(3,445)	$	98	$	(23)	$	38	$	3,635
Stock-based compensation	—	—		—	—		29		—		—		—		—		29
Net income	—	—		—	—		—		920		—		—		8		928
Shares withheld related to net share settlement of stock awards	—	—		—	—		(1)		—		—		—		—		(1)
Transactions with noncontrolling interests	—	—		—	—		—		—		—		—		76		76
Balance, June 30, 2023	—	$	—	215	$	—	$	6,995	$	(2,525)	$	98	$	(23)	$	122	$	4,667

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

5

CAESARS ENTERTAINMENT, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Six Months Ended June 30,
(In millions)	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	792	$	(801)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Loss from discontinued operations	—		386
Depreciation and amortization	623		606
Amortization of deferred financing costs and discounts	104		154
Provision for doubtful accounts	22		10
Loss on extinguishment of debt	197		—
Non-cash lease amortization	31		28
(Gain) loss on investments	(4)		49
Stock compensation expense	56		51
Loss on sale of business and disposal of property and equipment	9		3
Deferred income taxes	(951)		(55)
Gain on derivatives	—		(73)
Other non-cash adjustments to net income (loss)	23		(61)
Change in operating assets and liabilities:
Accounts receivable	23		(28)
Prepaid expenses and other assets	(12)		(30)
Income taxes payable	(12)		(1)
Accounts payable, accrued expenses and other liabilities	52		(122)
Net cash provided by operating activities	953		116
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(573)		(471)
Acquisition of gaming rights and trademarks	(15)		—
Proceeds from sale of business, property and equipment, net of cash sold	1		4
Proceeds from the sale of investments	3		121
Proceeds from insurance related to property damage	—		33
Other	40		—
Net cash used in investing activities	(544)		(313)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt and revolving credit facilities	4,840		750
Repayments of long-term debt and revolving credit facilities	(5,204)		(878)
Financing obligation payments	(4)		—
Debt issuance and extinguishment costs	(79)		—
Contributions from noncontrolling interest owners	77		—
Distributions to noncontrolling interest	(1)		—
Taxes paid related to net share settlement of equity awards	(14)		(23)
Net cash used in financing activities	(385)		(151)
CASH FLOWS FROM DISCONTINUED OPERATIONS:
Cash flows from operating activities	—		(18)
Cash flows from investing activities	—		(82)
Cash flows from financing activities	—		—
Net cash from discontinued operations	—		(100)
Effect of foreign currency exchange rates on cash	—		(29)
Increase (decrease) in cash, cash equivalents and restricted cash	24		(477)
Cash, cash equivalents and restricted cash, beginning of period	1,303		2,021
Cash, cash equivalents and restricted cash, end of period	$	1,327	$	1,544

6

	Six Months Ended June 30,
(In millions)	2023		2022
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO AMOUNTS REPORTED WITHIN THE CONSOLIDATED CONDENSED BALANCE SHEETS:
Cash and cash equivalents	$	1,122	$	997
Restricted cash	126		145
Restricted and escrow cash included in other assets, net	79		210
Cash, cash equivalents and restricted cash held for sale - discontinued operations	—		192
Total cash, cash equivalents and restricted cash	$	1,327	$	1,544
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash interest paid for debt	$	401	$	391
Cash interest paid for rent related to financing obligations	640		595
Income taxes paid, net	11		14
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Payables for capital expenditures	163		115

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

7

CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

The accompanying consolidated condensed financial statements include the accounts of Caesars Entertainment, Inc., a Delaware corporation, and its consolidated subsidiaries which may be referred to as the “Company,” “CEI,” “Caesars,” “we,” “our,” or “us” within these financial statements.

This Form 10-Q should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Annual Report”). Capitalized terms used but not defined in this Form 10-Q have the same meanings as in the 2022 Annual Report.

We also refer to (i) our Consolidated Condensed Financial Statements as our “Financial Statements,” (ii) our Consolidated Condensed Balance Sheets as our “Balance Sheets,” (iii) our Consolidated Condensed Statements of Operations and Consolidated Condensed Statements of Comprehensive Income (Loss) as our “Statements of Operations,” and (iv) our Consolidated Condensed Statements of Cash Flows as our “Statements of Cash Flows.”

Note 1. Organization and Description of Business

Organization

The Company is a geographically diversified gaming and hospitality company that was founded in 1973 by the Carano family with the opening of the Eldorado Hotel Casino in Reno, Nevada. Beginning in 2005, the Company grew through a series of acquisitions, including the acquisition of MTR Gaming Group, Inc. in 2014, Isle of Capri Casinos, Inc. in 2017, Tropicana Entertainment, Inc. in 2018, Caesars Entertainment Corporation in 2020 and William Hill PLC on April 22, 2021. The Company’s ticker symbol on the NASDAQ Stock Market is “CZR.”

Description of Business

The Company owns, leases, brands or manages an aggregate of 53 domestic properties in 18 states with approximately 52,700 slot machines, video lottery terminals and e-tables, approximately 2,700 table games and approximately 47,200 hotel rooms as of June 30, 2023. The Company operates and conducts sports wagering across 30 jurisdictions in North America, 22 of which offer mobile sports betting, and operates regulated online real money gaming businesses in six jurisdictions in North America. In addition, we have other domestic and international properties that are authorized to use the brands and marks of Caesars Entertainment, Inc., as well as other non-gaming properties. The Company’s primary source of revenue is generated by our casino properties’ gaming operations, retail and online sports betting, online gaming, and the Company utilizes its hotels, restaurants, bars, entertainment, racing, retail shops and other services to attract customers to its properties.

The Company’s operations for retail and mobile sports betting, online casino, and online poker are included under the Caesars Digital segment. As part of the Caesars Digital segment, the Company has made significant investments into the interactive business in recent years, including the acquisition of William Hill PLC and strategic expansions into new markets as legalization permits. The Company has utilized significant marketing campaigns with distinguished actors, athletes and media personalities promoting the Caesars Sportsbook app. The Company expects to continue to expand its operations in the Caesars Digital segment as new jurisdictions legalize retail and online gaming and sports betting.

Divestitures

We periodically divest of assets in order to raise capital, as a result of a determination that the assets are not core to our business, or due to regulatory requirements. A summary of recently completed divestitures of our properties as of June 30, 2023 is as follows:

Segment	Property	Date Sold	Sales Price
Regional	Belle of Baton Rouge Casino & Hotel (“Baton Rouge”)	May 5, 2022	*
Discontinued operations:
N/A	William Hill International	July 1, 2022	£2.0 billion

____________________

*Not meaningful.

8

CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

The following information presents the net revenues and net loss of recently completed divestitures:

	Three Months Ended June 30, 2022				Six Months Ended June 30, 2022
(In millions)	Baton Rouge		William Hill International		Baton Rouge		William Hill International
Net revenues	$	2	$	401	$	6	$	820
Net loss	(1)		(145)		(1)		(448)

Note 2. Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The accompanying unaudited Financial Statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, the accompanying unaudited Financial Statements contain all adjustments, all of which are normal and recurring, considered necessary for a fair presentation. The results of operations for these interim periods are not necessarily indicative of the operating results for other quarters, for the full year or any future period. Additionally, certain reclassifications of prior year presentations have been made to conform to the current period presentation.

The presentation of financial information herein for the periods before the Company’s divestitures of various properties is not fully comparable to the periods after the sale dates.

Consolidation of Subsidiaries and Variable Interest Entities

Our Financial Statements include the accounts of Caesars Entertainment, Inc. and its subsidiaries after elimination of all intercompany accounts and transactions.

We consolidate all subsidiaries in which we have a controlling financial interest and variable interest entities (“VIEs”) for which we or one of our consolidated subsidiaries is the primary beneficiary. Control generally equates to ownership percentage, whereby (i) affiliates that are more than 50% owned are consolidated; (ii) investments in affiliates of 50% or less but greater than 20% are generally accounted for using the equity method where we have determined that we have significant influence over the entities; and (iii) investments in affiliates of 20% or less are generally accounted for as investments in equity securities.

We consider ourselves the primary beneficiary of a VIE when we have both the power to direct the activities that most significantly affect the results of the VIE and the right to receive benefits or the obligation to absorb losses of the entity that could be potentially significant to the VIE. We review investments for VIE consideration if a reconsideration event occurs to determine if the investment qualifies, or continues to qualify, as a VIE. If we determine an investment qualifies, or no longer qualifies, as a VIE, there may be a material effect to our Financial Statements.

Cash and Cash Equivalents

Cash equivalents include highly-liquid investments with original maturities of three months or less at the date of purchase including investments in money market funds that can be redeemed immediately at the current net asset value per share. A money market fund is a mutual fund whose investments are primarily in short-term debt securities designed to maximize current income with liquidity and capital preservation, usually maintaining per share net asset value at a constant amount, such as one dollar. Cash and cash equivalents also include cash maintained for gaming operations. The carrying amounts approximate the fair value because of the short maturity of those instruments (Level 1).

Restricted Cash

Restricted cash includes certificates of deposit and similar instruments that are subject to remeasurement on a recurring basis, as well as cash deposits which are restricted under certain operating agreements, regulatory requirement, or for future capital expenditures in the normal course of business.

9

CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Advertising

Advertising costs are expensed in the period the advertising first occurs. Advertising costs for the three months ended June 30, 2023 and 2022 were $52 million and $106 million, respectively, and for the six months ended June 30, 2023 and 2022 totaled $120 million and $376 million, respectively, and are included within operating expenses. Advertising costs in the six months ended June 30, 2022 included significant television, radio and internet marketing campaigns promoting our Caesars Sportsbook. Advertising costs related to the Caesars Digital segment are primarily recorded in Casino expense.

Interest Expense, Net

	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2023		2022		2023		2022
Interest expense	$	597	$	567	$	1,201	$	1,127
Capitalized interest	(8)		(5)		(14)		(11)
Interest income	(3)		(3)		(7)		(5)
Total interest expense, net	$	586	$	559	$	1,180	$	1,111

Recently Issued Accounting Pronouncements

Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements.

Note 3. Investments in and Advances to Unconsolidated Affiliates

Pompano Joint Venture

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

While the Company holds a 50% variable interest in the joint venture, it is not the primary beneficiary; as such, the investment in the joint venture is accounted for using the equity method. The Company participates evenly with Cordish in the profits and losses of the joint venture, which are included in Transaction and other costs, net on the Statements of Operations. As of both June 30, 2023 and December 31, 2022, the Company’s investment in the joint venture was $80 million and is recorded in Investments in and advances to unconsolidated affiliates on the Balance Sheets. The Company has no further obligation to contribute additional real estate or cash as of June 30, 2023.

NeoGames

The Company held an investment in NeoGames S.A., a global leader of iLottery solutions and services to national and state-regulated lotteries, and other investments. On March 14, 2022, the Company sold its investment at fair value for $26 million and recorded a loss of $34 million during the six months ended June 30, 2022, which is included within Other income on the Statements of Operations.

10

CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

Note 4. Property and Equipment

(In millions)	June 30, 2023		December 31, 2022
Land	$	2,088	$	2,092
Buildings, riverboats, and leasehold and land improvements	13,364		13,094
Furniture, fixtures, and equipment	2,241		2,054
Construction in progress	474		351
Total property and equipment	18,167		17,591
Less: accumulated depreciation	(3,534)		(2,993)
Total property and equipment, net	$	14,633	$	14,598

A portion of our property and equipment is subject to various operating leases for which we are the lessor. Leased property includes our hotel rooms, convention space and retail space through various short-term and long-term operating leases.

Depreciation Expense
	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2023		2022		2023		2022
Depreciation expense	$	287	$	255	$	551	$	498

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

Note 5. Goodwill and Intangible Assets, net

The purchase price of an acquisition is allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition. The Company determines the estimated fair values after review and consideration of relevant information including discounted cash flows, quoted market prices and estimates made by management. To the extent the purchase price exceeds the fair value of the net identifiable tangible and intangible assets acquired and liabilities assumed, such excess is recorded as goodwill.

Changes in Carrying Value of Goodwill and Other Intangible Assets
			Non-Amortizing Intangible Assets
(In millions)	Amortizing Intangible Assets		Goodwill		Other
Balances as of December 31, 2022	$	1,060	$	11,004	$	3,654
Amortization expense	(72)		—		—
Acquisition of gaming rights and trademarks	15		—		4
Balances as of June 30, 2023	$	1,003	$	11,004	$	3,658

11

CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

Gross Carrying Value and Accumulated Amortization of Intangible Assets Other Than Goodwill
	June 30, 2023							December 31, 2022
(Dollars in millions)	Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Amortizing intangible assets
Customer relationships	3 - 7 years	$	587	$	(318)	$	269	$	587	$	(276)	$	311
Gaming rights and other	10 - 34 years	227		(21)		206		212		(16)		196
Trademarks	15 years	313		(82)		231		313		(73)		240
Reacquired rights	24 years	250		(23)		227		250		(17)		233
Technology	6 years	110		(40)		70		110		(30)		80
		$	1,487	$	(484)	1,003		$	1,472	$	(412)	1,060
Non-amortizing intangible assets other than Goodwill
Trademarks						1,998						1,998
Gaming rights						1,137						1,133
Caesars Rewards						523						523
						3,658						3,654
Total amortizing and non-amortizing intangible assets other than Goodwill, net						$	4,661					$	4,714

Amortization expense with respect to intangible assets for the three months ended June 30, 2023 and 2022 totaled $36 million and $51 million, respectively, and for the six months ended June 30, 2023 and 2022 totaled $72 million and $108 million, respectively, which is included in depreciation and amortization in the Statements of Operations.

Estimated Five-Year Amortization
	Remaining 2023		Years Ended December 31,
(In millions)			2024		2025		2026		2027		2028
Estimated annual amortization expense	$	71	$	128	$	120	$	120	$	78	$	41

Note 6. Fair Value Measurements

Items Measured at Fair Value on a Recurring Basis

The following table sets forth the assets and liabilities measured at fair value on a recurring basis, by input level, in the Balance Sheets:

	June 30, 2023
(In millions)	Level 1		Level 2		Level 3		Total
Assets:
Marketable securities	$	2	$	—	$	—	$	2
Total assets at fair value	$	2	$	—	$	—	$	2

	December 31, 2022
(In millions)	Level 1		Level 2		Level 3		Total
Assets:
Marketable securities	$	2	$	2	$	—	$	4
Total assets at fair value	$	2	$	2	$	—	$	4

12

CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

Restricted Cash

The estimated fair values of the Company’s restricted cash are based upon quoted prices available in active markets (Level 1) or quoted prices for similar assets in active and inactive markets (Level 2) and represent the amounts the Company would expect to receive if the Company sold the instruments classified as restricted cash. Restricted cash classified as Level 1 includes cash equivalents held in short-term certificate of deposit accounts or money market type funds. Restricted cash that is not subject to remeasurement on a recurring basis is not included in the table above.

Marketable Securities 

Marketable securities consist primarily of trading securities held by the Company’s captive insurance subsidiary and deferred compensation plans. The estimated fair values of the Company’s marketable securities are determined on an individual asset basis based upon quoted prices of identical assets available in active markets (Level 1), quoted prices of identical assets in inactive markets, or quoted prices for similar assets in active and inactive markets (Level 2), and represent the amounts the Company would expect to receive if the Company sold these marketable securities.

Derivative Instruments

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

Forward Contracts

The Company entered into several foreign exchange forward contracts with third parties to hedge the risk of fluctuations in the foreign exchange rates between USD and GBP. During the three and six months ended June 30, 2022, the Company recorded gains of $55 million and $76 million, respectively, related to forward contracts, which have been recorded in Other income (loss) on the Statements of Operations. All forward contracts were settled as of July 1, 2022.

Interest Rate Swap Derivatives

The Company used interest rate swaps to manage the mix of debt between fixed and variable rate instruments. The term of the last interest rate swaps ended on December 31, 2022.

13

CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

Accumulated Other Comprehensive Income (Loss)

The changes in Accumulated other comprehensive income (loss) by component, net of tax, for the periods through June 30, 2023 and 2022 are shown below.

(In millions)	Unrealized Net Gains on Derivative Instruments		Foreign Currency Translation Adjustments		Other		Total
Balances as of December 31, 2021	$	73	$	(36)	$	(1)	$	36
Other comprehensive income (loss) before reclassifications	5		(33)		—		(28)
Amounts reclassified from accumulated other comprehensive income	8		—		—		8
Total other comprehensive income (loss), net of tax	13		(33)		—		(20)
Balances as of March 31, 2022	$	86	$	(69)	$	(1)	$	16
Other comprehensive income (loss) before reclassifications	1		(44)		1		(42)
Amounts reclassified from accumulated other comprehensive income	6		—		—		6
Total other comprehensive income (loss), net of tax	7		(44)		1		(36)
Balances as of June 30, 2022	$	93	$	(113)	$	—	$	(20)
Balances as of December 31, 2022	$	94	$	(1)	$	(1)	$	92
Other comprehensive income (loss) before reclassifications	—		2		4		6
Total other comprehensive income (loss), net of tax	—		2		4		6
Balances as of March 31, 2023	$	94	$	1	$	3	$	98
Other comprehensive income (loss) before reclassifications	—		(1)		1		—
Total other comprehensive income (loss), net of tax	—		(1)		1		—
Balances as of June 30, 2023	$	94	$	—	$	4	$	98

Note 7. Litigation, Commitments and Contingencies

Litigation

General

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

COVID-19 Insurance Claims

The COVID-19 public health emergency had a significant impact on the Company’s business and employees, as well as the communities where the Company operates and serves. The Company purchased broad property insurance coverage to protect against “all risk of physical loss or damage” and resulting business interruption, unless specifically excluded by policies. The Company submitted claims for losses incurred as a result of the COVID-19 public health emergency which exceed $2 billion. The insurance carriers under the Company’s insurance policies have asserted that the policies do not cover losses incurred by the Company as a result of the COVID-19 public health emergency and have refused to make payments under the applicable policies. Therefore, on March 19, 2021, the Company filed a lawsuit against its insurance carriers in the state court in Clark County, Nevada. On June 8, 2021, the Company filed an amended complaint. Litigation in this matter has been temporarily stayed as the parties await a decision from the Nevada Supreme Court in a separate similar case, in which the decision may affect the Company’s claims in this matter. There can be no assurances as to the outcome of this litigation.

14

CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

Contractual Commitments

Capital Commitments

Harrah’s New Orleans

In April 2020, the Company and the State of Louisiana, by and through the Louisiana Gaming Control Board, entered into an Amended and Restated Casino Operating Contract. Additionally, the Company, New Orleans Building Corporation and the City entered into a Second Amended and Restated Lease Agreement. Based on these amendments related to Harrah’s New Orleans, the Company is required to make a capital investment of $325 million on or around Harrah’s New Orleans by July 15, 2024. The capital investment will involve the rebranding of the property to Caesars New Orleans which includes a renovation and full interior and exterior redesign, 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 June 30, 2023, total capital expenditures have been $187 million since the project began.

Atlantic City

As required by the New Jersey Gaming Control Board, in 2020, the Company funded $400 million in escrow to provide funds for a three year capital expenditure plan in the state of New Jersey. The capital plan includes significant room renovations at both Caesars Atlantic City and Harrah’s Atlantic City, as well as the addition of new restaurants with celebrity partners. As of June 30, 2023 and December 31, 2022, the restricted cash balance remaining in the escrow account was $59 million and $118 million, respectively. This amount is currently included in restricted cash in Other assets, net.

Sports Sponsorship/Partnership Obligations

The Company has agreements with certain professional sports leagues and teams, sporting event facilities and media companies for tickets, suites, advertising, marketing, promotional and sponsorship opportunities including communication with partner customer databases. Additionally, a selection of such partnerships provide Caesars with exclusivity to access the aforementioned rights within the casino and/or sports betting category. As of June 30, 2023 and December 31, 2022, obligations related to these agreements were $788 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 the Company does not record a right of use asset or lease liability. The Company recognizes expenses in the period services are received in accordance with the various agreements. In addition, assets or liabilities may be recorded related to the timing of payments as required by the respective agreement.

Self-Insurance

The Company is self-insured for workers compensation and other risk insurance, as well as health insurance and general liability. The Company’s total estimated self-insurance liability as of June 30, 2023 and December 31, 2022, was $207 million and $203 million, respectively, which is included in Accrued other liabilities in our 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.

15

CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

Note 8. Long-Term Debt

	June 30, 2023						December 31, 2022
(Dollars in millions)	Final Maturity	Rates	Face Value		Book Value		Book Value
Secured Debt
Baltimore Revolving Credit Facility (a)	2023	variable	$	—	$	—	$	—
Baltimore Term Loan (a)	2024	variable	250		247		262
CEI Revolving Credit Facility	2028	variable	—		—		—
CEI Term Loan A	2028	variable	731		729		747
CEI Term Loan B	2030	variable	2,494		2,441		—
CRC Senior Secured Notes	2025	5.75%	989		980		979
CEI Senior Secured Notes due 2025	2025	6.25%	3,399		3,367		3,360
CEI Senior Secured Notes due 2030	2030	7.00%	2,000		1,977		—
Convention Center Mortgage Loan	N/A	N/A	—		—		400
CRC Incremental Term Loan	N/A	N/A	—		—		972
CRC Term Loan	N/A	N/A	—		—		3,243
Unsecured Debt
CEI Senior Notes due 2027	2027	8.125%	1,611		1,591		1,589
CEI Senior Notes due 2029	2029	4.625%	1,200		1,187		1,186
Special Improvement District Bonds	2037	4.30%	45		45		47
Long-term notes and other payables			2		2		2
Total debt			12,721		12,566		12,787
Current portion of long-term debt			(68)		(68)		(108)
Deferred finance charges associated with the CEI Revolving Credit Facility			—		(18)		(20)
Long-term debt			$	12,653	$	12,480	$	12,659
Unamortized discounts and deferred finance charges					$	173	$	318
Fair value			$	12,607

____________________

(a)The Baltimore Revolving Credit Facility matured on July 7, 2023, and as described below, the Baltimore Term Loan was fully repaid on July 17, 2023.

Annual Estimated Debt Service Requirements as of June 30, 2023
	Remaining		Years Ended December 31,
(In millions)	2023		2024 (a)		2025		2026		2027		Thereafter		Total
Annual maturities of long-term debt	$	33	$	314	$	4,453	$	65	$	1,676	$	6,180	$	12,721
Estimated interest payments	450		860		800		520		510		790		3,930
Total debt service obligation (b)	$	483	$	1,174	$	5,253	$	585	$	2,186	$	6,970	$	16,651

____________________

(a)Maturity of $249 million in 2024 was repaid on July 17, 2023.

(b)Debt principal payments are estimated amounts based on contractual maturity and scheduled repayment dates. Interest payments are estimated based on the forward-looking SOFR curve, where applicable. Actual payments may differ from these estimates.

Current Portion of Long-Term Debt

The current portion of long-term debt as of June 30, 2023 includes the principal payments on the term loans, other unsecured borrowings, and special improvement district bonds that are contractually