Employee Benefit Plans (Notes)

12 Months Ended

Dec. 31, 2018

Deferred Compensation and Employee Benefit Plans

Deferred Compensation

On December 6, 2018, we adopted the Caesars Entertainment Corporation Executive Supplemental Savings Plan III and the Caesars Entertainment Corporation Outside Director Deferred Compensation Plan, effective January 1, 2019. These plans are unfunded, nonqualified deferred compensation plans. Payment obligations pursuant to the plans are unsecured general obligations of the Company and affiliates of the Company employing participants in the ESSP III. There is no liability as of December 31, 2018.

Deferred Compensation Plans

As of December 31, 2018, certain current and former employees of Caesars, and our subsidiaries and affiliates, have balances under: (i) the Harrah’s Entertainment, Inc. Executive Supplemental Savings Plan, (ii) the Harrah’s Entertainment, Inc. Executive Supplemental Savings Plan II, (iii) the Park Place Entertainment Corporation Executive Deferred Compensation Plan, (iv) the Harrah’s Entertainment, Inc. Deferred Compensation Plan, and (v) the Harrah’s Entertainment, Inc. Executive Deferred Compensation Plan (collectively, the “existing deferred compensation plans”). These plans are deferred compensation plans that allow certain employees an opportunity to save for retirement and other purposes.

Each of the plans is now frozen and is no longer accepting contributions. However, participants may still earn returns on existing plan balances based upon their selected investment alternatives, which are reflected in their deferral accounts. The total liability

recorded in Deferred credits and other liabilities for these plans was $53 million and $63 million as of December 31, 2018 and 2017, respectively.

Trust Assets

CEC is a party to a trust agreement (the “Trust Agreement”) and an escrow agreement related to a settlement agreement where CEC assumed all obligations to CEOC plan participants under or with respect to all five of the existing deferred compensation plans contemporaneously with the Effective Date (the “Escrow Agreement”), each structured as so-called “rabbi trust” arrangements, which holds assets that may be used to satisfy obligations under the existing deferred compensation plans above. Amounts held pursuant to the Trust Agreement and the Escrow Agreement were approximately $99 million and $125 million as of December 31, 2018 and 2017, respectively, and have been reflected within Deferred charges and other assets on the Balance Sheets.

Savings and Retirement Plan

We maintain a defined contribution savings and retirement plan that allows employees to make pre-tax and after-tax contributions. Under the plan, participating employees may elect to contribute up to 50% of their eligible earnings (subject to Internal Revenue Service (“IRS”) rules and regulations). Participating employees become vested in matching contributions on a pro-rata basis over five years of credited service. Prior to January 1, 2018, participating employees were eligible to receive a company match of 50% up to 6% of eligible earnings that the individual elected to contribute with an individual cap of $600. During 2018, the company match was the greater of 25% up to 6% of earnings that the individual elected to contribute with no cap or 50% up to 6% of eligible earnings that the individual elected to contribute with an individual cap of $600. Beginning January 1, 2019, the match increases to 50% up to 6% of eligible earnings that the individual elects to contribute with no individual cap (subject to further limitations for certain higher-salaried employees). Our contribution expense for this plan was $14 million, $7 million, and $6 million for the years ended December 31, 2018, 2017, and 2016, respectively.

Pension Commitments

We have a defined benefit plan for employees of our London Clubs International subsidiary that provides benefits based on final pensionable salary. The plan is no longer accepting participants or employee contributions. The assets of the plan are held in a separate trustee-administered fund, and death-in-service benefits, professional fees, and other expenses are paid by the pension plan. Annual contributions are made as required. We account for this plan under the immediate recognition method, under which actuarial gains and losses are recognized in our Statements of Operations in the year in which the gains and losses occur rather than deferring them into Other comprehensive income/(loss) and amortizing them over future periods. Any such amounts are recorded in the fourth quarter of each year, and during 2018 and 2017, we recognized a gain of $19 million and a loss of $1 million, respectively. These amounts do not reflect current compensation costs and are recorded outside of Income from operations, within Other income/(loss) on our Statements of Operations.

As of December 31, 2018 and 2017, total plan assets were $180 million and $212 million, respectively, with projected benefit obligations totaling $217 million and $278 million, respectively, resulting in a net pension liability of $37 million and $66 million, respectively, which is recorded within Deferred credits and other liabilities on our Balance Sheets. As of December 31, 2018, our estimated long-term expected return on assets for this plan is 4.9% with a 2.9% discount rate. For the year ended December 31, 2018, we contributed $6 million to the plan, which we expect to remain consistent annually.

Multi-employer Pension Plans

The Company contributes to a number of multi-employer defined benefit pension plans under the terms of collective-bargaining agreements that cover its union-represented employees. The risks of participating in these multi-employer plans are different from a single-employer plan in the following respects:


i.	Assets contributed to the multi-employer plan by one employer may be used to provide benefits to employees of other participating employers.


ii.	If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers.


iii.	If the Company chooses to stop participating in some of its multi-employer plans, the Company may be required to pay those plans an amount based on the underfunding of the plan, referred to as a “withdrawal liability.”

Multi-employer Pension Plan Participation

Pension Protection Act Zone Status ⁽¹⁾

Contributions

(In millions) ⁽²⁾

Pension Fund

EIN/Pension Plan Number

2018

2017

FIP/RP Status ⁽³⁾

2018

2017

2016

Surcharge Imposed

Expiration Date of Collective-Bargaining Agreement ⁽⁴⁾

Southern Nevada Culinary and Bartenders Pension Plan⁽⁵⁾

88-6016617/001

Green

May 31, 2023

Legacy Plan of the National Retirement Fund ⁽⁵⁾⁽⁶⁾

13-6130178/001

N/A

Red

N/A

—

N/A

Legacy Plan of the UNITE HERE Retirement Fund ⁽⁶⁾

82-0994119/001

Red

N/A

Yes

—

February 29, 2020

Central Pension Fund of the IUOE & Participating Employers ⁽⁷⁾

36-6052390/001

Green

March 31, 2021

Western Conference of Teamsters Pension Plan

91-6145047/001

Green

Various up to March 31, 2023

Local 68 Engineers Union Pension Plan^(5)(8)(9)

51-0176618/001

Yellow

—

April 30, 2020

NJ Carpenters Pension Fund

22-6174423/001

Yellow

Yes

—

April 30, 2020

Painters IUPAT

52-6073909/001

Yellow

Yes

Various up to June 30, 2021

Other Funds

Total Contributions

____________________

⁽¹⁾

Represents the Pension Protection Act zone status for applicable plan year beginning January 1, except where noted otherwise. The zone status is based on information that the Company received from the plan administrator and is certified by the plan’s actuary. Among other factors, plans in the red zone are generally less than 65% funded, plans in the yellow zone are between 65% and less than 80% funded, and plans in the green zone are at least 80% funded. All plans detailed in the table above utilized extended amortization provisions to calculate zone status.


⁽²⁾	Comparability to periods prior to the Effective Date are impacted by the consolidation of CEOC LLC in 2017.


⁽³⁾	Indicates plans for which a financial improvement plan (“FIP”) or a rehabilitation plan (“RP”) is either pending or has been implemented.


⁽⁴⁾	The terms of the current agreement continue indefinitely until either party provides appropriate notice of intent to terminate the contract.


⁽⁵⁾	Employer provided more than 5% of the total contributions for the plan years ended 2017 and 2016. As of the date the financial statements were issued, Forms 5500 were not available for the 2018 plan year.

⁽⁶⁾

Effective January 1, 2018, the Legacy Plan of the National Retirement Fund (“NRF”) spun-off a portion of the plan into the newly created Legacy Plan of the UNITE HERE Retirement Fund (“HERE Plan”). CEC contributes to the HERE Plan and we expect to provide more than 5% of the total contributions for the plan year ended 2018, but the Form 5500 is not yet available. CEC no longer contributes to the NRF.


⁽⁷⁾	Plan years begin February 1.


⁽⁸⁾	Plan years begin July 1.


⁽⁹⁾	The Plan has yet to provide an FIP. FIP status is not considered pending or implemented.

In 2017, we reached an agreement with Hilton Hotels Corporation, whereby CEC received $12 million, of which $7 million was recorded in Deferred credits and other liabilities and $5 million was recorded in Accrued expenses and other current liabilities on the Balance Sheet at December 31, 2017, in exchange for assuming responsibility of a 31.75% funding liability of the Hilton Hotels Retirement Plan. These proceeds have been used to make quarterly contributions, of which $5 million has been contributed for the year ended December 31, 2018. Once the proceeds are depleted, future contributions will be expensed as incurred. $5 million of the remaining proceeds is recorded within Accrued expenses and other liabilities and $2 million is recorded within Deferred credits and other liabilities on our balance sheet as of December 31, 2018.