Related Party Transactions

Transactions with Sponsors and their Affiliates

The members of Hamlet Holdings LLC (“Hamlet Holdings”) are comprised of individuals affiliated with Apollo Global Management, LLC (“Apollo”) and affiliates of TPG Capital LP (“TPG”) (collectively, the “Sponsors”). As of March 31, 2015, Hamlet Holdings beneficially owned approximately 61% of our common stock pursuant to an irrevocable proxy providing Hamlet Holdings with sole voting and sole dispositive power over those shares, and, as a result, the Sponsors have the power to elect all of our directors.

Caesars Entertainment has a services agreement with the Sponsors relating to the provision of financial and strategic advisory services and consulting services. The Sponsors granted a waiver of the monitoring fees for management services; however, we reimburse the Sponsors for expenses they incur related to these management services. The reimbursed expenses are included in corporate expense and totaled approximately $2 million and $1 million for the three months ended March 31, 2015 and 2014, respectively.

We may engage in transactions with companies owned or controlled by affiliates of the Sponsors in the normal course of business. We believe such transactions are conducted at fair value. Pursuant to the terms of these agreements, Caesars Entertainment incurred expenses of approximately $2 million and $2 million for the three months ended March 31, 2015 and 2014, respectively.

In addition, certain entities affiliated with or under the control of our Sponsors may from time to time transact in and hold our debt securities, and participate in any modifications of such instruments on terms available to any other holder of our debt.

Transactions with CEOC

As described in Note 4, upon its filing for Chapter 11 and its subsequent deconsolidation, transactions with CEOC will no longer be eliminated in consolidation and will be considered related party transactions for Caesars Entertainment. A summary of these transactions is provided in the table below.



	Three Months Ended March 31,
(In millions)	2015
Shared services allocated expenses to CEOC	$	75
Shared services allocated expenses from CEOC	15
Management fees	9
Octavius Tower lease	7
Service provider fee	2
Cross marketing and trademarks	1

Services Joint Venture

CES provides certain corporate management and administrative operations to the Members, and the cost of these services are allocated among the Members which include CEOC. CEOC reimburses CES for the allocated costs. The CES allocated costs include amounts for insurance coverage.

Insurance Coverage

We are self-insured for employee health, dental, vision and risk insurance, and our insurance claims and reserves include accruals of estimated settlements for known claims, as well as accruals of actuarial estimates of incurred but not reported claims. For employee health, dental, and vision insurance, CES receives funding from our subsidiaries in order to pay claims on their behalf. Caesars Entertainment provides risk insurance coverage to CEOC and receives insurance premiums on an installment basis, which are intended to cover claims processed on CEOC’s behalf.

CEOC Shared Services Agreement

Pursuant to a shared services agreement, CEOC provided us with certain corporate management and administrative operations, and the costs of these services were allocated to us.

Management Fees

CGP LLC pays 50% of the ongoing management fee to CEOC for the CGP LLC properties that are managed by CEOC or CES. The remaining 50% of the management fees were paid in advance, and are being recognized into management fee expense over the term of the agreements. With respect to the properties sold to CGP LLC in 2014 and Horseshoe Baltimore, which opened in August 2014, management fees consist of a base management fee calculated as a percentage of monthly net operating revenues and an incentive management fee calculated as a percentage of EBITDA for each operating year. With respect to Planet Hollywood, management fees consist of a base management fee calculated as a percentage of adjusted gross operating revenue plus net casino wins, and an incentive fee calculated as a percentage of EBITDA.

Octavius Tower Lease Agreement

Under the Octavius Tower lease agreement, CEOC leases the Octavius Tower at Caesars Palace from CERP and pays rent totaling $35 million annually through expiration in April 2026.

Service Provider Fee

CEOC, CERP and CGP LLC have a shared services agreement that provides CERP and CGP LLC will pay for certain indirect corporate support costs. CEOC is authorized to charge CERP and CGP LLC for an amount equal to 24.6% and 5.4%, respectively, of unallocated corporate support costs. Pursuant to the terms of this agreement, Caesars Entertainment incurred expenses of approximately $2 million for the three months ended March 31, 2015.

Cross Marketing and Trademark License Agreement

CIE and CEOC have a Cross Marketing and Trademark License Agreement in effect until December 31, 2026, unless terminated earlier pursuant to the terms of the agreement. The agreement grants CIE the exclusive right to use various brands of Caesars Entertainment in connection with social and mobile games and online real money gaming in exchange for a 3% royalty. This agreement also provides for cross-marketing and promotional activities between CIE and CEOC, including participation by CIE in CEC's Total Rewards loyalty program. CEOC also receives a revenue share from CIE for customer referrals. Pursuant to the terms of this agreement, Caesars Entertainment incurred expenses of $1 million for the three months ended March 31, 2015.

Due from/to Affiliates

As of March 31, 2015, due from affiliates was $49 million and represented a receivable due to CES from CEOC for shared services performed on behalf of CEOC.

As of March 31, 2015, due to affiliates was $27 million and represented a payable due to CEOC, primarily from CGP LLC for shared services performed on behalf of CGP LLC.

Stock-Based Compensation

CEC maintains an equity incentive awards plan under which CEC may issue time-based and performance-based stock options, restricted stock units and restricted stock awards to CEOC employees. Although awards under the plan result in the issuance of shares of CEC, because CEOC is no longer a consolidated subsidiary of CEC, we have accounted for these awards as nonemployee awards subsequent to the date of deconsolidation.

Employee Benefit Plans

CEC maintains a defined contribution savings and retirement plan in which employees of CEOC may participate. The plan provides for, among other things, pre-tax and after-tax contributions by employees. Under the plan, participating employees may elect to contribute up to 50% of their eligible earnings (subject to certain IRS and plan limits).