Liquidity Considerations

We are a highly leveraged company primarily resulting from the leverage of CEOC, which had $18,410.9 million in face value of debt outstanding as of September 30, 2014, out of the total $25,529.3 million face value of our consolidated outstanding indebtedness. As a result, a significant portion of our liquidity needs are for debt service, including significant interest payments. Our consolidated debt service obligation for the remainder of 2014 is $831.3 million, consisting of $93.4 million in principal maturities and $737.9 million in required interest payments. Our consolidated debt service obligation for 2015 is $2,469.8 million, consisting of $140.6 million in principal maturities and $2,329.2 million in required interest payments.

As a result of our debt service requirements and a general decline in our gaming activity since 2007, with Atlantic City properties and our regional markets being more heavily impacted by this trend, we have experienced substantial operating and net losses in recent years, resulting in a total stockholders' deficit of $3,714.4 million as of September 30, 2014. Further, we expect to experience operating and net losses for the remainder of 2014 and the foreseeable future.

Caesars Entertainment is a holding company, with its holdings consisting of an interest in three primary entities:


•	Caesars Entertainment Operating Company;


•	Caesars Entertainment Resort Properties, LLC; and


•	Caesars Growth Partners, LLC.

CERP and CGP LLC have material amounts of debt; however, we believe their cash and cash equivalents balances, cash flows from operations, and financing available under revolving credit facilities will be sufficient to meet normal operating requirements and to fund planned capital expenditures during the next 12 months. CEOC, which remains heavily levered, is the focus of ongoing efforts designed to position CEOC for significant deleveraging.

See Note 9, "Debt," for details of our debt outstanding and related restrictive covenants, including the restrictions on our subsidiaries to pay dividends to CEC or otherwise transfer cash to CEC. This detail includes, among other information, a table presenting details of our individual borrowings outstanding as of September 30, 2014 and December 31, 2013, as well as discussion of recent changes in our debt outstanding, and changes in the terms of existing debt subsequent to December 31, 2013.

CEOC Liquidity Discussion and Analysis

CEOC net revenues were $3,939.1 million for the nine months ended September 30, 2014, representing 61.7% of consolidated net revenues of CEC for the period. CEOC is highly leveraged, and a significant amount of its liquidity needs are for debt service, including significant interest payments. As of September 30, 2014, CEOC had $18,410.9 million face value of outstanding indebtedness and its current debt service obligation over the next 12 months is $1,829.5 million, consisting of $82.1 million in principal maturities and $1,747.4 million in required interest payments.

As a result of the CEC consolidated factors described above, CEOC has experienced substantial net losses and operating losses in recent years, resulting in total stockholders' deficit of $7,542.3 million as of September 30, 2014. Further, CEOC expects to experience operating and net losses for the foreseeable future.

CEOC's cash and cash equivalents, excluding restricted cash, totaling $1,479.9 million at September 30, 2014, compared with $1,438.7 million at December 31, 2013. CEOC experienced negative operating cash flows of $548.7 million for the nine months ended September 30, 2014 and expects to experience negative operating cash flows for the foreseeable future.

CEOC does not currently expect that its cash flows from operations will be sufficient to repay its indebtedness and will ultimately need to pursue additional debt or equity offerings or seek a refinancing, amendment, private restructuring or a reorganization under Chapter 11 of the Bankruptcy Code.

CEOC has sufficient liquidity at present, including CEOC’s ability to borrow under any of its credit arrangements as described in Note 9, "Debt." However, CEOC estimates that, absent a refinancing, amendment, private restructuring, or a reorganization under Chapter 11 of the Bankruptcy Code, based on its current operating forecasts and the underlying assumptions, that it would require additional sources of liquidity to fund its operations and obligations beginning during the fourth quarter of 2015. These factors raise substantial doubt as to CEOC's ability to continue as a going concern beyond the fourth quarter of 2015. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.

During the nine months ended September 30, 2014, CEC and CEOC have been undertaking a number of actions to mitigate this uncertainty. For more information on these actions and the impact that the related transactions have on CEOC's liquidity and capital structure, see Note 6, "Property Transaction between CEOC and CGP LLC and Related Financing," Note 9, "Debt," and Note 10, "Stockholders' Equity and Loss Per Share."

Also see Note 15, "Litigation, Contractual Commitments and Contingent Liabilities", and Note 20, "Subsequent Events" for more information regarding Noteholder disputes and claims related to these actions and transactions. If a court were to find in favor of the claimants in any of these disputes, such determination could have a material adverse effect on CEOC's business, financial condition, results of operations, and prospects and on the ability of lenders and Noteholders to recover on claims under CEOC's indebtedness.

On September 12, 2014, we announced that CEC and CEOC had executed non-disclosure agreements ("NDAs") with certain First Lien Creditors of CEOC's 11.25% senior secured notes due 2017; CEOC's 8.5% senior secured notes due 2020 and CEOC's 9% senior secured notes due 2020 in an effort to restructure CEOC's debt.

On October 16, 2014, CEOC entered into certain control arrangements with the Collateral Agent in order to provide the first lien secured creditors with a perfected lien on its cash. Such arrangements do not restrict CEOC's ability to utilize cash and are not expected to have an operational impact on CEOC (see Note 9, "Debt").

On October 17, 2014, we announced that CEC and CEOC had executed NDAs with certain beneficial holders of debt, including senior secured term loans, issued by CEOC pursuant to the Third Amended and Restated Credit Agreement dated July 25, 2014, by and among CEC, CEOC, the lender parties and Credit Suisse AG, Cayman Islands Branch, as administrative agent, in an effort to restructure CEOC's debt.

On October 29, 2014, we announced that one of the First Lien Creditors that had previously executed an NDA did not extend its NDA. While CEC and CEOC are no longer in discussions with the one First Lien Creditor that did not extend its NDA, and while no agreement has been reached yet on the terms of a restructuring, CEC and CEOC are continuing discussions with the remaining First Lien Creditors all of which have extended their NDAs.

From time to time, depending upon market, pricing, and other conditions, and on CEOC's cash balances and liquidity, CEOC may seek to acquire or exchange notes or other indebtedness through open market purchases, privately negotiated transactions, tender offers, redemption, exchange offers or otherwise, upon such terms and at such prices as CEOC may determine (or as may be provided for in the indentures governing the notes), for cash or other consideration, including CEOC common stock. In addition, CEOC has considered and will continue to evaluate potential transactions to reduce net debt, such as debt for debt exchanges, debt for equity exchanges or restructuring transactions.

CEOC's ability to refinance or restructure its debt, or to issue additional debt or equity, will depend upon, among other things:


◦	the condition of the capital markets at the time, which is beyond CEOC's control;


◦	CEOC's future financial and operating performance, which will be affected by prevailing economic conditions and financial, business, regulatory and other factors, many of which are beyond CEOC's control;


◦	CEOC's continued compliance with the terms and covenants in its credit facilities, indentures and loan agreements that govern our debt; and


◦	the results of ongoing discussions with CEOC's Noteholders and lenders.

CERP Liquidity Discussion and Analysis

As of September 30, 2014, CERP's cash and cash equivalents totaled $200.8 million. Its operating cash inflows are typically used for operating expenses, debt service costs and working capital needs. CERP is highly leveraged and a significant portion of its liquidity needs are for debt service. As of September 30, 2014, CERP had $4,737.2 million face value of indebtedness outstanding including capital lease indebtedness. See Note 9, "Debt," for additional information related to CERP indebtedness and related restrictive covenants. Cash paid for interest for the nine months ended September 30, 2014, was $243.7 million. Payments of short-term debt obligations and other commitments are expected to be made from operating cash flows.

CERP's estimated interest payments for the remainder of 2014 are $162.8 million, for the years ended December 31, 2015 through 2018 are $390.0 million, $395.3 million, $413.6 million, and $422.7 million, respectively, and thereafter are $933.8 million.

CERP's ability to fund its operations, pay its debt obligations, and fund planned capital expenditures depends, in part, upon economic and other factors that are beyond its control, and disruptions in capital markets and restrictive covenants related to its existing debt could impact CERP's ability to secure additional funds through financing activities. We believe that CERP's cash and cash equivalents balance, its cash flows from operations, and financing available under its revolving credit facility will be sufficient to meet normal operating requirements during the next 12 months and to fund planned capital expenditures.

CGP LLC Liquidity Discussion and Analysis

CGP LLC's primary sources of liquidity include currently available cash and cash equivalents, cash flows generated from its operations and borrowings under CIE's credit facility with Caesars Entertainment. CGP LLC's cash and cash equivalents, excluding restricted cash, totaled $989.2 million as of September 30, 2014.

Payments of short-term debt obligations and other commitments are expected to be made from operating cash flows. CGP LLC's operating cash inflows are used for operating expenses, debt service costs, working capital needs and capital expenditures in the normal course of business. Long-term obligations are expected to be paid through operating cash flows, refinancing of existing debt or the issuance of new debt, or, if necessary, additional investments from its equity holders. CGP LLC's ability to refinance debt will depend upon numerous factors such as market conditions, our financial performance, and the limitations applicable to such transactions under CGP LLC's and its subsidiaries' financing documents. Additionally, CGP LLC's ability to fund operations, pay debt obligations, and fund planned capital expenditures depends, in part, upon economic and other factors that are beyond CGP LLC's control, and disruptions in capital markets and restrictive covenants related to CGP LLC's existing debt could impact CGP LLC's ability to fund liquidity needs, pay indebtedness and secure additional funds through financing activities.

CGP LLC believes that its cash and cash equivalents and its cash flows from operations will be sufficient to meet its normal operating and debt service requirements during the next 12 months and the foreseeable future and to fund capital expenditures expected to be incurred in the normal course of business.

Consolidated Liquidity Discussion and Analysis

Consolidated cash and cash equivalents, excluding restricted cash, totaled $3,182.4 million as of September 30, 2014. Cash and cash equivalents as of September 30, 2014, includes $989.2 million held by our consolidated VIE, CGP LLC, which is not available for our use to fund operations or satisfy our obligations unrelated to CGP LLC.

In addition to cash flows from operations, available sources of cash include amounts available under our current revolving credit facilities. CEOC's revolving credit facility provides for up to $106.1 million, of which $7.8 million remained as available borrowing capacity for CEOC as of September 30, 2014. CERP's revolving credit facility provides for up to $269.5 million, of which $194.5 million remained as available borrowing capacity for CERP as of September 30, 2014. CGP LLC's revolving credit facility provides for up to $150.0 million, of which $149.9 million remained as available borrowing capacity for CGP LLC as of September 30, 2014.

The following summarizes our liquidity:



	September 30, 2014
(In millions)	CEOC			CERP			CGP LLC			Parent
Cash and cash equivalents	$	1,479.9		$	200.8		$	989.2		$	512.5
Revolver capacity	106.1			269.5			150.0			—
Revolver capacity drawn or committed to letters of credit	(98.3		)	(75.0		)	(0.1		)	—
Total Liquidity	$	1,487.7		$	395.3		$	1,139.1		$	512.5

We experienced negative consolidated operating cash flows of $422.0 million for the nine months ended September 30, 2014, including negative operating cash flows of $548.7 million from CEOC, and expect to experience negative consolidated operating cash flows for the remainder of 2014 and the foreseeable future.

As previously noted, CEOC does not currently expect that its cash flows from operations will be sufficient to repay its indebtedness and it will ultimately need to pursue additional debt or equity offerings or seek a refinancing, amendment, private restructuring or a reorganization under Chapter 11 of the Bankruptcy Code.

Although CEOC does not believe that its cash flows from operations combined with existing liquidity sources will be sufficient to repay its indebtedness when it comes due, because of the absence of cross-default provisions in the indebtedness due within the next 15 months and the absence of any parent guarantee (as discussed in Note 9, "Debt”), we do not believe that the impact of any default that CEOC could experience in the next 15 months would materially impact the liquidity of CEC and its consolidated operating subsidiaries other than CEOC.

Prior to October 1, 2014, our properties, including properties held in our CERP and CGP subsidiaries, were managed by CEOC. We therefore have historically been reliant on CEOC and its employees to support these operations and enable us to generate cash flows in our other operating subsidiaries.

As described in Note 18, "Caesars Enterprise Services," CEC, CEOC, CERP, and CGPH (collectively, the "CES Members") entered into a services joint venture, Caesars Enterprise Services ("CES"). Effective October 1, 2014, substantially all our properties are managed by Caesars Enterprise Services (and the remaining properties will be transitioned upon regulatory approval). Under the terms of the joint venture and the Omnibus License and Enterprise Services Agreement we believe that CEC and its other operating subsidiaries will continue to have access to the services historically provided to us by CEOC and its employees, its trademarks and its programs.

We believe that, other than as disclosed above with respect to CEOC, CEC and its other consolidated operating subsidiaries' cash and cash equivalents balances, cash flows from operations, and financing available under revolving credit facilities will be sufficient to fund their operations and obligations during the next 12 months and to fund planned capital expenditures.

The foregoing are forward-looking statements based on assumptions as of the date of this filing that may or may not prove to be correct. Actual results may differ materially from CEOC's present expectations. Factors that may cause actual results to differ materially from present expectations include, without limitation, the results of ongoing discussions with CEOC's lenders and Noteholders and the positive or negative changes in the operational and other matters assumed in preparing the CEOC forecasts that would have an impact on CEOC's ability to continue as a going concern.