Debt

Summary of Debt by Financing Structure

	As of December 31,
	2015						2014
(In millions)	Face Value			Book Value			Book Value
CERP	$	4,694		$	4,627		$	4,754
CGP	2,402			2,337			2,312
CEOC⁽¹⁾	—			—			15,930
CEC	—			—			13
Total debt	7,096			6,964			23,009
Current portion of long-term debt	(187		)	(187		)	(15,779		)
Long-term debt	$	6,909		$	6,777		$	7,230
Fair value of debt	$	6,421

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⁽¹⁾	CEOC was deconsolidated effective January 15, 2015, therefore no amounts are reported for CEOC debt as of December 31, 2015. See Note 3.

Annual Estimated Debt Service Requirements

	Years ended December 31,
(In millions)	2016		2017		2018		2019		2020		Thereafter		Total
Principal
CERP	$	117	$	27	$	25	$	25	$	3,350	$	1,150	$	4,694
CGP	70		21		25		201		300		1,785		2,402
Total principal	187		48		50		226		3,650		2,935		7,096

Estimated Interest
CERP	390		390		400		400		400		130		2,110
CGP	190		190		190		190		170		150		1,080
Total interest	580		580		590		590		570		280		3,190

Principal and Interest
CERP	507		417		425		425		3,750		1,280		6,804
CGP	260		211		215		391		470		1,935		3,482
Total principal and interest	$	767	$	628	$	640	$	816	$	4,220	$	3,215	$	10,286

Summary of Debt and Revolving Credit Facility Cash Flows from Financing Activities

	December 31, 2015					December 31, 2014
(In millions)	Proceeds		Repayments			Proceeds		Repayments
CERP Term Loan	$	—	$	(25	)	$	—	$	(25	)
CERP Senior Secured Revolver	230		(330		)	295		(115		)
CGPH Term Loan	—		(12		)	1,141		—
CGPH Senior Secured Revolving Credit Facility	80		(35		)	—		—
CGPH First Closing Term Loan	—		—			693		(700		)
CGPH Notes	—		—			660		—
Horseshoe Baltimore Credit Facility	—		—			76		—
Horseshoe Baltimore FF&E Facility	—		(3		)	30		—
Cromwell Credit Facility	—		(10		)	—		—
Planet Hollywood Loan Agreement	—		—			—		(495		)
Incremental Term Loans	—		—			1,528		(1,275		)
Other debt activity	—		(25		)	13		(189		)
Capital lease payments	—		(10		)	—		(34		)
Total	$	310	$	(450	)	$	4,436	$	(2,833	)

Current Portion of Long-Term Debt

The current portion of long-term debt is $187 million as of December 31, 2015. For CERP, the current portion of long-term debt is $117 million, which includes the $80 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 that are expected to be paid within twelve months. For CGP, the current portion of long-term debt is $70 million, which includes the $45 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 that are expected to be paid within 12 months.

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.

CEOC reclassified all of the debt impacted by its bankruptcy to current as of December 31, 2014. CEOC’s current portion of long-term debt at December 31, 2014, net of unamortized discount and deferred finance charges of $2.2 billion, was $15.7 billion.

Debt Discounts and Deferred Finance Charges

Debt discounts and deferred finance charges incurred in connection with the issuance of debt are 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 extinguish debt prior to its original maturity date. Effective for our quarter ended June 30, 2015, we adopted authoritative guidance amending the existing requirements for the presentation of deferred finance charges. The amendments to the guidance require that deferred finance charges related to a recognized debt liability be presented in the balance sheet as a direct deduction from that debt liability, consistent with the presentation of a debt discount. As of December 31, 2014, we have reclassified $204 million of unamortized deferred finance charges from deferred charges and other assets to long-term debt.

As of December 31, 2015 and 2014, book values of debt are presented net of unamortized discounts and deferred finance charges of $132 million and $2.6 billion, respectively.

Fair Value

We calculate the fair value of debt based on borrowing rates available as of December 31, 2015, 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.

CERP Debt

	As December 31,
	2015								2014
Detail of Debt (Dollars in millions)	Final Maturity	Rate(s) ⁽¹⁾	Face Value			Book Value			Book Value
CERP Credit Facilities
CERP Term Loan⁽²⁾	2020	7.00%	$	2,450		$	2,403		$	2,420
CERP Senior Secured Revolving Credit Facility ⁽³⁾	2018	variable	80			80			180
CERP Notes⁽⁴⁾
CERP First Lien Notes	2020	8.00%	1,000			992			990
CERP Second Lien Notes	2021	11.00%	1,150			1,138			1,137
Capital lease obligations and other	to 2017	various	14			14			27
Total CERP debt			4,694			4,627			4,754
Current portion of CERP long-term debt			(117		)	(117		)	(39		)
CERP long-term debt			$	4,577		$	4,510		$	4,715

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⁽¹⁾	Interest rate is fixed, except where noted.


⁽²⁾	Variable interest rate calculated as a fixed rate plus the greater of LIBOR or a 1% floor. The rate is set at the 1% floor as of December 31, 2015.


⁽³⁾	Variable interest rate for amounts currently borrowed is calculated by adding LIBOR to a base rate of 6.00%.


⁽⁴⁾	Registered pursuant to a registration statement on Form S-4, which was declared effective on February 10, 2015.

CERP Financing

In October 2013, we completed the financing for the CERP Credit Facilities and the CERP Notes (“CERP Financing”) to retire a previous financing.

CERP Credit Facilities

The CERP senior secured revolving credit facility allows for borrowings 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 December 31, 2015, no amounts were committed to outstanding letters of credit.

Borrowings under the senior secured revolving credit facility bear interest at the same rate elections as the CERP Term Loans. On a quarterly basis, we are required to pay each lender (i) a commitment fee in respect of any unborrowed amounts under the senior secured revolving credit facility and (ii) a letter of credit fee in respect of the aggregate face amount of outstanding letters of credit under the senior secured revolving credit facility. As of December 31, 2015, the senior secured revolving credit facility bore a commitment fee for unborrowed amounts of 50 basis points.

CERP Notes

The Notes issued under the CERP Financing contained registration rights, which culminated in an exchange offer on March 18, 2015 resulting in the CERP Notes (with terms substantially identical to those of the originally-issued CERP Notes, except that the registered CERP Notes no longer have transfer restrictions or registration rights). CERP is a holding company that owns no operating assets and has no significant operations independent of its subsidiaries.

CGP Debt

	As December 31,
	2015								2014
Detail of Debt (Dollars in millions)	Final Maturity	Rate(s) ⁽¹⁾	Face Value			Book Value			Book Value
CGPH Credit Facilities
CGPH Senior Secured Term Loan ⁽²⁾	2021	6.25%	$	1,157		$	1,126		$	1,133
CGPH Senior Secured Revolving Credit Facility ⁽³⁾	2019	variable	45			45			—
CGPH Notes ⁽⁴⁾	2022	9.38%	675			660			659
Horseshoe Baltimore Credit and FF&E Facilities
Horseshoe Baltimore Credit Facility⁽⁵⁾	2020	8.25%	300			288			286
Horseshoe Baltimore Revolving Facility Loan⁽⁶⁾	2018	variable	—			—			—
Horseshoe Baltimore FF&E Facility⁽⁵⁾	2019	8.75%	27			27			30
Cromwell Credit Facility⁽⁵⁾	2019	11.00%	175			169			178
Other secured debt	2018	8.00%	5			4			4
Special Improvement District Bonds	2037	5.30%	14			14			14
Capital lease obligations and other	2016 to 2017	various	4			4			8
Total CGP debt			2,402			2,337			2,312
Current portion of CGP long-term debt			(70		)	(70		)	(20		)
CGP long-term debt			$	2,332		$	2,267		$	2,292

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⁽¹⁾	Interest rate is fixed, except where noted.


⁽²⁾	Variable interest rate calculated as a fixed rate plus the greater of LIBOR or a 1% floor. The rate is set at the 1% floor as of December 31, 2015.


⁽³⁾	Variable interest rate calculated as LIBOR plus 5.25%.


⁽⁴⁾	Registered pursuant to a registration statement on Form S-4, which was declared effective on June 26, 2015.


⁽⁵⁾	Variable interest rate calculated as a fixed rate plus the greater of LIBOR or a 1.25% floor. The rate is set at the 1.25% floor as of December 31, 2015.


⁽⁶⁾	Variable interest rate calculated as LIBOR plus 7.00%.

Property Transaction between CEOC and CGP

In 2014, CEOC sold to CGP, among other things, four properties, related intellectual property, and 50% of certain ongoing management fees and any termination fees. To fund the purchase price, CGP entered into the CGPH Credit Facilities and CGPH Notes. As part of this transaction, CGP assumed the debt associated with the Cromwell Credit Facility and used $477 million of the net proceeds from the CGPH Credit Facilities to repay all amounts then outstanding under the Planet Hollywood Loan Agreement. See Note 2 for more details of the property transaction.

CGPH Credit Facilities

The CGPH senior secured revolving credit facility provides for an aggregate principal amount of up to $150 million. As of December 31, 2015, no material amounts were committed to outstanding letters of credit. 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 December 31, 2015, the Horseshoe Baltimore Credit Facility included a senior secured revolving facility loan for an aggregate principal amount of up to $10 million.

The Horseshoe Baltimore FF&E Facility was 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.

CEOC Debt

As described in Note 3, we deconsolidated CEOC effective January 15, 2015. Therefore, we have no CEOC debt as of December 31, 2015.



	As of
	December 31, 2014
(In millions)	Book Value
Secured Debt	$	9,884
Credit Facilities ⁽¹⁾	5,106
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)

Secured Debt

Cash Tender Offer

Using proceeds from the Incremental Term Loans described below, in July 2014, CEOC completed a cash tender offer for the $190 million aggregate principal amount outstanding of its 10.00% Second-Priority Senior Secured Notes due 2015 (the “10.00% Notes”):


•	Received tenders from the holders of $103 million in aggregate principal amount;


•	Purchased an additional $83 million in aggregate principal amount for $191 million; and


•	Resulted in the retirement and redemption of approximately 98% of outstanding principal amount.

Payment on Second-Priority Senior Secured Notes

Pursuant to the indenture dated December 24, 2008 (“2008 Indenture”), on December 15, 2014, CEOC was required to redeem approximately $18 million of aggregate principal of its 10.00% second-priority senior secured notes due 2015 and 10.00% second-priority senior secured notes due 2018 (“Second-Lien Notes”). On December 12, 2014, CEOC deposited $18 million with Delaware Trust Company, as paying agent under the 2008 Indenture, to fund the required redemption. The Second Lien Notes are included in Secured Debt in the table above.

CEOC was subsequently advised by Delaware Trust Company that it had provided contrary instructions to The Depository Trust Company to distribute the funds received with directions it had received from the beneficial holders purporting to own a majority of the Second-Lien Notes. These contrary instructions provided for the allocation of the deposited funds ratably between principal and interest due under the 2008 Indenture. CEOC believes that the contrary instructions were inconsistent with both its direction and the terms of the 2008 Indenture. As a result, CEOC has accounted for these payments as an $18 million reduction in the principal amount of the Second-Lien Notes, consistent with the instructions that were communicated to Delaware Trust Company.

Credit Facilities

In 2014, CEOC completed the offering of $1.8 billion of incremental term loans (“Incremental Term Loans”) due no later than March 1, 2017, and used the net cash proceeds to repay $794 million on existing term loans outstanding under the Credit Facilities and to complete the cash tender offers for the 10.00% Notes (above) and 5.625% Notes (below).

As of December 31, 2014, CEOC Credit Facilities also included a senior secured revolving credit facility in an aggregate principal amount of up to $106 million, including both a letter of credit sub-facility and a swingline loan sub-facility. There were no amounts outstanding under the revolving credit facility as of December 31, 2014.

Unsecured Senior Debt

Cash Tender Offer

Using proceeds from the Incremental Term Loans described above, in July 2014, CEOC completed a cash tender offer for the $792 million aggregate principal amount outstanding of its 5.625% Senior Notes due 2015 (the “5.625% Notes”):


•	Received tenders from the holders of $44 million in aggregate principal amount;


•	Purchased and redeemed an additional $747 million in aggregate principal amount for $830 million; and


•	Resulted in the retirement and redemption of 100% of the outstanding principal amount.

Note Purchase and Support Agreement

In August 2014, CEOC and CEC announced an agreement (the “Note Purchase and Support Agreement”) with certain holders (the “Holders”) of CEOC’s outstanding 6.50% Senior Notes due 2016 (the “6.50% Notes”) and 5.75% Senior Notes due 2017 (the “5.75% Notes” and, together with the 6.50% Notes, the “Senior Unsecured Notes”) in connection with a private refinancing transaction, pursuant to which, among other things


(i)	Holders representing $238 million aggregate principal amount of the Senior Unsecured Notes and greater than 51% of each class of the Senior Unsecured Notes that were held by non-affiliates of CEC and CEOC agreed to sell to CEC and CEOC an aggregate principal amount of approximately $89 million of the 6.50% Notes and an aggregate principal amount of approximately $66 million of the 5.75% Notes;


(ii)	CEC agreed to pay the Holders a ratable amount of $78 million of cash in the aggregate,


(iii)	CEOC agreed to pay the Holders a ratable amount of $78 million of cash in the aggregate,


(iv)	CEOC agreed to pay the Holders accrued and unpaid interest in cash; and


(v)	CEC agreed to contribute $427 million in aggregate principal ($368 million net of discount and accrued interest contributed) of Senior Unsecured Notes to CEOC for cancellation.

Distribution of CEOC Notes

In 2014, CGP distributed 100% of its remaining investment in certain CEOC notes as a dividend to its members, CEC and Caesars Acquisition Company (“CAC”), (the “Notes Distribution”). CEC received $187 million in aggregate principal amount of the 6.50% Senior Notes and $206 million in aggregate principal amount of the 5.75% Senior Notes, and CAC received $138 million in aggregate principal amount of the 6.50% Senior Notes and $151 million in aggregate principal amount of the 5.75% Senior Notes.

The CEOC notes held by CGP prior to the Notes Distribution were eliminated in consolidation. The CEOC notes received by CEC were subsequently contributed to CEOC for cancellation which resulted in no impact on the consolidated financial statements of CEC. The CEOC notes received by CAC resulted in an increase in the face value and book value reported for CEOC debt because CAC is not a consolidated entity. In addition, the Notes Distribution resulted in a $160 million decrease in noncontrolling interest (which represents the fair value of the CEOC notes) and an $89 million increase to the discount on long-term debt. The decrease in noncontrolling interest represents CGP's reported fair value of the CEOC notes at the time of the Notes Distribution, while the increase to the discount represents the difference between CGP's fair value for the CEOC notes and the book value reported by CEOC. The Notes Distribution to CAC was accounted for as a new issuance of debt. As a result of this transaction, the $289 million in face value of notes distributed by CGP to CAC was reflected as being outstanding debt prior to the deconsolidation of CEOC, with a total discount of $129 million, resulting in an increase to net book value of debt outstanding equal to the fair value of the related notes, which was $160 million.

Summary of Loss on Extinguishment of Debt

(In millions)	Years Ended December 31,
Related Transaction	2014		2013
CEOC Secured Debt	$	14	$	29
CEOC Credit Facilities	22		—
CEOC Unsecured Senior Debt	31		—
Planet Hollywood Loan Agreement	28		—
Other	1		1
Total loss on extinguishment of debt	$	96	$	30

Terms of Outstanding Debt

Restrictive Covenants

The CERP Notes, CERP Credit Facilities, CGPH Senior Secured Term Loan, CGPH Notes, Horseshoe Baltimore Credit and FF&E Facilities, and Cromwell Credit Facility all include negative covenants, subject to certain exceptions, and contain affirmative covenants and events of default, subject to exceptions, baskets and thresholds (including equity cure provisions in the case of the CERP Credit Facilities, Horseshoe Baltimore Credit and FF&E Facilities, and the Cromwell Credit Facility), all of the preceding being customary in nature.

The restrictive covenants also require that we maintain Senior Secured Leverage Ratios (“SSLR”) as shown in the table below. SSLR is defined as the ratio of first lien senior secured net debt to earnings before interest, taxes, depreciation and amortization, adjusted as defined (“Adjusted EBITDA”). The Cromwell Credit Facility also required The Cromwell to maintain a minimum amount of consolidated EBITDA through Q1 2015.



Credit Facility	Covenant Type	Effective Period	Requirement
CERP Credit Facilities	CERP Maximum SSLR	From inception	8.00	to 1.00
CGPH Senior Secured Term Loan	CGPH Maximum SSLR	From inception	6.00	to 1.00
Horseshoe Baltimore Credit and FF&E Facilities⁽¹⁾	CBAC Maximum SSLR	Q1 - Q4 2016	7.50	to 1.00
	CBAC Maximum SSLR	Q1 - Q4 2017	6.00	to 1.00
	CBAC Maximum SSLR	Q1 2018 and thereafter	4.75	to 1.00
Cromwell Credit Facility	Cromwell Minimum EBITDA	Q4 2014 - Q1 2015	$7.5 Million
	Cromwell Maximum SSLR	Q2 2015 - Q1 2016	5.25	to 1.00
	Cromwell Maximum SSLR	Q2 2016 - Q1 2017	5.00	to 1.00
	Cromwell Maximum SSLR	Q2 2017 and thereafter	4.75	to 1.00

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⁽¹⁾	CBAC Borrower, LLC (“CBAC”) is a joint venture in which Caesars Baltimore Investment Company, LLC (“CBIC”) holds an interest. CBIC is a wholly owned subsidiary of CGP.

Guarantees

CERP has pledged a significant portion of its assets as collateral under the notes and facilities. The CERP Notes are co-issued, as well as fully and unconditionally guaranteed, jointly and severally, by Caesars Entertainment Resort Properties, LLC (parent entity) and each of its wholly-owned subsidiaries on a senior secured basis.

The CGPH Senior Secured 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 Notes are secured by substantially all of the existing and future property and assets of CGPH and the subsidiary guarantors (subject to exceptions), and are guaranteed by CGPH and certain subsidiaries (subject to exceptions).

The Horseshoe Baltimore Credit Facility is secured by substantially all material assets of CBAC Borrower, LLC and its wholly-owned domestic subsidiaries.

The Horseshoe Baltimore FF&E Facility is secured by the FF&E that was purchased with the proceeds.

The Cromwell Credit Facility is secured by the assets of the Cromwell.

Restricted Net Assets

Because of the restrictions in our borrowings and other arrangements, the amount of net assets at consolidated subsidiaries not available to be remitted to CEC via dividend, loan or transfer was $2.1 billion and $2.4 billion, as of December 31, 2015 and 2014, respectively.