Debt

Summary of Debt by Financing Structure

	June 30, 2015						December 31, 2014
(In millions)	Face Value			Book Value			Book Value
CEOC	$	—		$	—		$	15,930
CERP	4,728			4,655			4,754
CGP	2,436			2,366			2,312
CEC	3			3			13
Total Debt	7,167			7,024			23,009
Current Portion of Long-Term Debt	(222		)	(222		)	(15,779		)
Long-Term Debt	$	6,945		$	6,802		$	7,230

Current Portion of Long-Term Debt

The current portion of long-term debt is $222 million as of June 30, 2015. For CERP, the current portion of long-term debt is $133 million, which includes $95 million outstanding under CERP’s revolving credit facility as well as principal payments on its senior secured loan, other unsecured borrowings, and capitalized lease obligations. For CGP, the current portion of long-term debt is $86 million, which includes $60 million outstanding under the CGPH revolving credit facility as well as principal payments on term loans, special improvement district bonds, and various capitalized lease obligations.

Borrowings under the revolving credit facilities are each subject to separate note agreements executed based on the provisions of the applicable credit facility agreements, and each note has a contractual maturity of less than one year. The applicable credit facility agreements each have a contractual maturity of greater than one year and we have the ability to rollover the outstanding principal balances on a long-term basis; however, we currently intend to repay the principal balances within the following 12 months. Amounts borrowed under the revolving credit facilities are intended to satisfy short term liquidity needs and are classified as current.

Debt Discounts and Deferred Finance Charges

Debt discounts and deferred finance charges incurred in connection with the issuance of debt are capitalized and amortized to interest expense based on the related debt agreements primarily using the effective interest method. Unamortized discounts are written off and included in our gain or loss calculations to the extent we retire debt prior to its original maturity date. As described in Note 6, “Recently Issued Accounting Pronouncements,” we adopted authoritative guidance amending the existing requirements for the presentation of debt issuance costs.

As of June 30, 2015 and December 31, 2014, book values of debt are presented net of total unamortized discounts of $111 million and $2.4 billion, respectively, and total unamortized debt deferred finance charges of $32 million and $204 million, respectively.

Fair Value

As of June 30, 2015 and December 31, 2014, our outstanding debt had fair values of $6.4 billion and $17.5 billion, respectively, and face values of $7.2 billion and $25.6 billion, respectively. We estimated the fair value of debt based on borrowing rates available as of June 30, 2015 and December 31, 2014 for debt with similar terms and maturities, and based on market quotes of our publicly traded debt. We classify the fair value of debt within level 1 and level 2 in the fair value hierarchy.

CEOC Debt

As described in Note 4, we deconsolidated CEOC effective January 15, 2015. Therefore, no amounts are reported for CEOC debt as of June 30, 2015.



	December 31, 2014
(In millions)	Book Value
Credit Facilities ⁽¹⁾	$	5,106
Secured Debt	9,884
Subsidiary-Guaranteed Debt	477
Unsecured Senior Debt	463
Other Unsecured Borrowings	77
Total CEOC Debt	16,007
Additional Debt Discount	(77		)
Total CEOC Debt, as consolidated	$	15,930

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⁽¹⁾ CEC guarantees collection of amounts under the CEOC Credit Facilities (see Note 1)

CERP Debt



	June 30, 2015								December 31, 2014
Detail of Debt (Dollars in millions)	Final Maturity	Rate(s)	Face Value			Book Value			Book Value
Secured Debt
CERP Term Loan	2020	7.00%	$	2,463		$	2,411		$	2,420
CERP Revolving Credit Facility	2018	various	95			95			180
CERP First Lien Notes	2020	8.00%	1,000			991			990
CERP Second Lien Notes	2021	11.00%	1,150			1,138			1,137
Capitalized Lease Obligations	to 2017	various	9			9			13
Other Unsecured Borrowings
Other	2016	0.00% - 6.00%	11			11			14
Total CERP Debt			4,728			4,655			4,754
Current Portion of CERP Long-Term Debt			(133		)	(133		)	(39		)
CERP Long-Term Debt			$	4,595		$	4,522		$	4,715

CERP Financing

CERP Credit Facilities

As of June 30, 2015, the CERP Credit Facilities provided for an aggregate principal amount of up to $2.8 billion, composed of (i) senior secured term loans in an aggregate principal amount of $2.5 billion (“CERP Term Loans”) and a senior secured revolving credit facility in an aggregate principal amount of up to $270 million. The CERP Term Loans require scheduled quarterly payments of $6 million, with the balance due at maturity. As of June 30, 2015, $95 million of borrowings were outstanding under the CERP revolving credit facility, and no amounts were committed to outstanding letters of credit.

CERP Notes

As of June 30, 2015, the CERP Notes had an aggregate face value of $2.2 billion. The CERP Notes consist of (i) $1.0 billion aggregate principal amount of 8.0% first-priority senior secured notes due 2020 (“CERP First Lien Notes”) and (ii) $1.2 billion aggregate principal amount of 11.0% second-priority senior secured notes due 2021 (“CERP Second Lien Notes”).

CERP pledged a significant portion of its assets as collateral under the CERP Senior Secured Credit Facilities and the CERP Notes.

Registration Statement

In connection with the CERP Financing, CERP committed to register the CERP Notes originally issued pursuant to Rule 144A of the Securities Act of 1933, as amended (the “Initial CERP Notes”) under a registration statement with the SEC by November 17, 2014. Accordingly, CERP filed an initial registration statement on Form S-4 (the “Registration Statement”) on October 16, 2014, and amendments to such Registration Statement on November 25, 2014, December 24, 2014, and February 9, 2015. The Registration Statement was declared effective on February 10, 2015 (the “Effective Date”).

Since the Effective Date was not within 180 days following the CERP, LLC Merger, CERP incurred additional interest on the Initial CERP Notes of $2 million. Upon the consummation of the exchange offer on March 18, 2015, the Initial CERP Notes were exchanged and replaced with the CERP Notes. The terms of the CERP Notes are substantially identical to that of the Initial CERP Notes, except that the CERP Notes have no transfer restrictions or registration rights. The CERP Notes are co-issued, as well as fully and unconditionally guaranteed, jointly and severally, by CERP and each of its subsidiaries on a senior secured basis. CERP is a holding company that owns no operating assets and has no significant operations independent of its subsidiaries.

CERP Restrictive Covenants

The CERP Notes and CERP Credit Facilities include negative covenants, subject to certain exceptions, and contain customary events of default, subject to customary or agreed-upon exceptions, baskets and thresholds (including equity cure provisions in the case of the CERP Credit Facilities).

The CERP Credit Facilities also contain certain customary affirmative covenants and require that CERP maintains a senior secured leverage ratio (“SSLR”) of no more than 8.00 to 1.00, which is the ratio of first lien senior secured net debt to earnings before interest, taxes, depreciation and amortization, adjusted as defined (“CERP Adjusted EBITDA”). CERP is in compliance with the CERP Credit Facilities covenant as of June 30, 2015.

CGP Debt



	June 30, 2015								December 31, 2014
Detail of Debt (Dollars in millions)	Final Maturity	Rate(s)	Face Value			Book Value			Book Value
Secured Debt
CGPH Term Loan ⁽¹⁾	2021	6.25%	$	1,163		$	1,129		$	1,133
CGPH Notes⁽¹⁾	2022	9.38%	675			660			659
Horseshoe Baltimore Credit and FF&E Facilities	to 2020	8.25% - 8.75%	330			316			316
Cromwell Credit Facility	2019	11.00%	183			177			178
Capital Lease Obligations	to 2017	various	2			2			4
CGPH Revolving Credit Facility	2019	5.44%	60			60			—
Other	2018	8.00%	5			4			4
Other Unsecured Borrowings
Special Improvement District Bonds	2037	5.30%	14			14			14
Other	2016	various	4			4			4
Total CGP Debt⁽²⁾			2,436			2,366			2,312
Current Portion of CGP Long-Term Debt			(86		)	(86		)	(20		)
CGP Long-Term Debt			$	2,350		$	2,280		$	2,292

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⁽¹⁾	Guaranteed by an indirect subsidiary of Caesars Growth Partners, LLC and certain of its wholly owned subsidiaries


⁽²⁾	As of June 30, 2015, CIE had $40 million drawn under a revolver arrangement with Caesars Entertainment. Accordingly, such debt is not considered outstanding in the above presentation.

CGPH Term Loan Credit Agreement

As of June 30, 2015, the CGPH Term Loan Credit Agreement provided for the CGPH Term Loan with a face value of $1.2 billion and a $150 million revolving credit facility. As of June 30, 2015, $60 million of borrowings were outstanding under the CGPH revolving credit facility, and no material amounts were committed to outstanding letters of credit.

The CGPH Term Loan is guaranteed by the direct parent of CGPH and certain subsidiaries of CGPH, and is secured by the direct parent’s equity interest in CGPH and substantially all of the existing and future assets of CGPH and the subsidiary guarantors.

The CGPH Term Loan includes customary negative covenants, subject to certain exceptions, and contains customary affirmative covenants and customary events of default, subject to customary or agreed-upon exceptions, baskets and thresholds (including equity cure provisions).

The CGPH Term Loan also requires that CGPH maintains an SSLR of no more than 6.00 to 1.00, which is the ratio of first lien senior secured net debt to earnings before interest, taxes, depreciation and amortization, adjusted as defined (“CGPH Adjusted EBITDA”). CGP is in compliance with the CGPH Term Loan covenants as of June 30, 2015.

CGPH Notes

As of June 30, 2015, the CGPH Notes had a face value of $675 million. The CGPH Notes include negative covenants, subject to certain exceptions, and contains affirmative covenants and events of default, subject to exceptions, baskets and thresholds (including equity cure provisions), all of the preceding being customary in nature.

The CGPH Notes are secured by substantially all of the existing and future property and assets of CGPH and the subsidiary guarantors (subject to exceptions). None of CEC, CERP, or CEOC guarantee the CGPH Notes.

Registration Rights Agreement. In connection with the issuance of the CGPH Notes, CGPH committed to register the CGPH Notes by April 17, 2015, which were originally issued pursuant to Rule 144A of the Securities Act of 1933, as amended (the “Initial CGPH Notes”). Accordingly, CGPH filed a registration statement on Form S-4 (the "Registration Statement") on March 30, 2015 and Amendments to such Registration Statement on May 18, 2015 and May 29, 2015. The Registration Statement was declared effective on June 26, 2015 (the “Effective Date”).

Since the Effective Date was not on or prior to April 17, 2015, CGPH incurred additional interest on the CGPH Notes beginning April 18, 2015, until the consummation of the exchange offer on July 28, 2015. Upon consummation of the exchange offer, the Initial CGPH Notes that were exchanged were replaced with new notes (the “Exchange Notes” and, together with the Initial CGPH Notes, the “CGPH Notes”), whose terms are substantially identical to that of the Initial CGPH Notes, except that the Exchange Notes have no transfer restrictions or registration rights. The CGPH Notes are guaranteed by CGPH and certain subsidiaries (subject to exceptions). In addition, CGPH is a holding company that owns no operating assets and has no significant operations independent of its subsidiaries.

Horseshoe Baltimore Credit and FF&E Facilities

As of June 30, 2015, the Horseshoe Baltimore Credit Facility provided for an aggregate principal amount of up to $310 million, consisting of (i) a $300 million senior secured term facility with a seven-year maturity, which was fully drawn as of June 30, 2015; and (ii) a $10 million senior secured revolving facility with a five-year maturity, which remained undrawn as of June 30, 2015. The Horseshoe Baltimore Credit Facility is secured by substantially all material assets of CBAC Borrower, LLC and its wholly-owned domestic subsidiaries.

As of June 30, 2015, the Horseshoe Baltimore FF&E Facility provided for an aggregate principal amount of up to $30 million to be used to finance or reimburse the purchase price and certain related costs of furniture, furnishings and equipment (referred to as “FF&E”) or refinance the purchase price of FF&E purchased with other funds as part of the development of the Horseshoe Baltimore casino. As of June 30, 2015, $30 million was outstanding on the Horseshoe Baltimore FF&E Facility.

The Horseshoe Baltimore Credit and FF&E Facilities include negative covenants, subject to certain exceptions, and contains affirmative covenants and events of default, subject to exceptions, baskets and thresholds (including equity cure provisions), all of the preceding being customary in nature.

The Horseshoe Baltimore Credit and FF&E Facilities also require that CBAC maintains an SSLR no more than 7.5 to 1.0 for the first three quarters, 6.0 to 1.0 for the next four quarters, and 4.75 to 1.0 for the remainder of the agreement beginning in the first quarter of 2016.

Management believes that CGP is in compliance with the Baltimore Credit Facility and Baltimore FF&E Facility covenants as of June 30, 2015.

Cromwell Credit Facility

As of June 30, 2015, The Cromwell holds a $183 million senior secured credit facility (the “Cromwell Credit Facility”). The Cromwell Credit Facility contains certain affirmative and negative covenants and requires The Cromwell to maintain, for each of the second and third full fiscal quarters following its opening date, at least $7.5 million in consolidated EBITDA (the “Cromwell EBITDA”). In addition, beginning in the second quarter of 2015, and continuing through the first quarter of 2016, the Cromwell SSLR may not exceed 5.25 to 1.00, defined as the ratio of The Cromwell’s first lien senior secured net debt to Cromwell EBITDA. The Cromwell SSLR for the four fiscal quarters from the second quarter of 2016 through the first quarter of 2017 may not exceed 5.00 to 1.00. The Cromwell SSLR beginning in the second quarter of 2017 and for each fiscal quarter thereafter, may not exceed 4.75 to 1.00.

The Cromwell Credit Facility allows the right to cure noncompliance with the covenant by making a cash cure payment, subject to certain limitations. CGP is in compliance with the Cromwell covenants as of June 30, 2015.