Caesars Entertainment Annual Report 2012

Plain-text annual report

CAESARS ENTERTAINMENT CORP FORM 10-K (Annual Report) Filed 03/15/13 for the Period Ending 12/31/12 Address ONE CAESARS PALACE DRIVE LAS VEGAS, NV 89109 7024076000 0000858339 Telephone CIK Symbol CZR SIC Code 7011 - Hotels and Motels Industry Casinos & Gaming Services 12/31 Sector Fiscal Year http://www.edgar-online.com © Copyright 2013, EDGAR Online, Inc. All Rights Reserved. Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) FOR THE FISCAL YEAR ENDED December 31, 2012 OR Commission File No. 1-10410 CAESARS ENTERTAINMENT CORPORATION (Exact name of registrant as specified in its charter) Registrant’s telephone number, including area code: (702) 407-6000 SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: Title of each class Name of each exchange on which registered Common stock, $0.01 par value NASDAQ Global Select Market SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes (cid:1) No  Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes (cid:1) No  Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No (cid:1) Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  No (cid:1) Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes (cid:1) No  The aggregate market value of common stock held by non-affiliates of the registrant as of June 30, 2012 was $429.9 million . As of March 1, 2013 , the registrant had 125,362,197 shares of Common Stock outstanding.  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (cid:1) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Delaware 62-1411755 (State of incorporation) (I.R.S. Employer Identification No.) One Caesars Palace Drive, Las Vegas, Nevada 89109 (Address of principal executive offices) (Zip code) Large accelerated filer (cid:1) Accelerated filer  Non-accelerated filer (cid:1) Smaller reporting company (cid:1) (Do not check if a smaller reporting company) CAESARS ENTERTAINMENT CORPORATION INDEX TO CONSOLIDATED FINANCIAL STATEMENTS We have proprietary rights to a number of trademarks used in this Form 10-K that are important to our business, including, without limitation, Caesars Entertainment, Caesars Palace, Harrah’s, Total Rewards, World Series of Poker, Horseshoe, Paris Las Vegas, Flamingo Las Vegas, and Bally's Las Vegas. We have omitted the ® and ™ trademark designations for such trademarks named in this Form 10-K. 2 Page No. Part I Item 1 – Business 3 Item 1A – Risk Factors 10 Item 1B – Unresolved Staff Comments 27 Item 2 – Properties 28 Item 3 – Legal Proceedings 30 Item 4 – Mine Safety Disclosure 30 Part II Item 5 – Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 32 Item 6 – Selected Financial Data 34 Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations 35 Item 7A – Quantitative and Qualitative Disclosures About Market Risk 55 Item 8 – Financial Statements and Supplementary Data 57 Report of Independent Registered Public Accounting Firm 57 Consolidated Financial Statements 58 Notes to Consolidated Financial Statements 62 Item 9 – Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 116 Item 9A – Controls and Procedures 116 Item 9B – Other Information 116 Part III Item 10 – Directors, Executive Officers and Corporate Governance 118 Item 11 – Executive Compensation 118 Item 12 – Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters 118 Item 13 – Certain Relationships and Related Transactions, and Director Independence 118 Item 14 – Principal Accounting Fees and Services 118 Part IV Item 15 – Exhibits, Financial Statement Schedules 119 Signatures 148 PART I ITEM 1. Business Overview Caesars Entertainment Corporation (referred to in this discussion, together with its consolidated subsidiaries where appropriate, as “Caesars,” “Caesars Entertainment,” the “Company,” “we,” “our” and “us”), a Delaware corporation, is the world's most diversified casino-entertainment provider and the most geographically diverse U.S. casino-entertainment company. Our business is primarily conducted through a wholly-owned subsidiary, Caesars Entertainment Operating Company, Inc. ("CEOC"), although certain material properties are not owned by CEOC. As of December 31, 2012 , we owned, operated, or managed, through various subsidiaries, 52 casinos in 13 U.S. states and seven countries. The majority of these casinos operate in the United States, primarily under the Caesars, Harrah’s, and Horseshoe brand names, and in England. Our casino entertainment facilities include 33 land-based casinos, 11 riverboat or dockside casinos, three managed casinos on Indian lands in the United States, one managed casino in Cleveland, Ohio, one managed casino in Canada, one casino combined with a greyhound racetrack, one casino combined with a thoroughbred racetrack, and one casino combined with a harness racetrack. Our land-based casinos include nine in England, two in Egypt, one in Scotland, one in South Africa and one in Uruguay. As of December 31, 2012 , our facilities had an aggregate of approximately three million square feet of gaming space and approximately 43,000 hotel rooms. Our industry-leading customer loyalty program, Total Rewards, has over 45 million members. We use the Total Rewards system to market promotions and to generate customer play across our network of properties. In addition, we own an online gaming business, providing for real money casino, bingo, and poker games in the United Kingdom, alliances with online gaming providers in Italy and France, "play for fun" offerings in other jurisdictions, social games on Facebook and other social media websites, and mobile application platforms. We also own and manage the World Series of Poker tournament and brand. We were incorporated on November 2, 1989 in Delaware and operated under predecessor companies prior to such date. Our principal executive offices are located at One Caesars Palace Drive, Las Vegas, Nevada 89109, telephone (702) 407-6000. On January 28, 2008 , Caesars Entertainment was acquired by affiliates of Apollo Global Management, LLC (together with such affiliates, “Apollo”) and affiliates of TPG Capital, LP (together with such affiliates, “TPG” and, together with Apollo, the “Sponsors”) in an all-cash transaction, hereinafter referred to as the “Acquisition,” valued at $30.7 billion , including the assumption of $12.4 billion of debt, and the incurrence of $1.0 billion of acquisition costs. Subsequent to the Acquisition, our stock was no longer publicly traded. Effective February 8, 2012 , as the result of our public offering, our common stock trades on the NASDAQ Global Select Market ("NASDAQ") under the symbol “ CZR .” In connection with the public offering, we effected a 1.742 -for- one split of our common stock. Unless otherwise stated, all applicable share and per-share data presented herein have been retroactively adjusted to give effect to this stock split. Description of Business We have established a rich history of industry-leading growth and expansion since we commenced casino operations in 1937 . We own, operate or manage casino entertainment facilities in more areas throughout the United States than any other participant in the casino industry. In addition to casinos, our facilities typically include hotel and convention space, restaurants, and non-gaming entertainment facilities. The descriptions below are as of December 31, 2012 , except where otherwise noted. In southern Nevada, Caesars Palace, Harrah’s Las Vegas, Rio All-Suite Hotel & Casino, Bally’s Las Vegas, Flamingo Las Vegas, Paris Las Vegas, Planet Hollywood Resort and Casino, The Quad Resort & Casino (formerly the Imperial Palace Hotel and Casino), Bill’s Gamblin’ Hall & Saloon, and Hot Spot Oasis are located in Las Vegas and draw customers from throughout the United States. Harrah’s Laughlin is located near both the Arizona and California borders and draws customers primarily from the southern California and Phoenix metropolitan areas and, to a lesser extent, from throughout the U.S. via charter aircraft. Bill's Gamblin' Hall & Saloon temporarily closed in early February 2013 to accommodate the renovations discussed below in the Summary of 2012 Events. The renovated hotel, casino, and restaurant are expected to open in December 2013 and the dayclub/nightclub is expected to open in April 2014. In northern Nevada, Harrah’s Lake Tahoe and Harveys Resort & Casino are located near Lake Tahoe and Harrah’s Reno is located in downtown Reno. These facilities draw customers primarily from northern California, the Pacific Northwest, and Canada. 3 Our Atlantic City casinos, Harrah’s Resort Atlantic City, Showboat Atlantic City, Caesars Atlantic City, and Bally’s Atlantic City, draw customers primarily from the Philadelphia metropolitan area, New York, and New Jersey. Harrah’s Philadelphia (formerly Harrah's Chester) is a combination harness racetrack and casino located approximately six miles south of Philadelphia International Airport and draws customers primarily from the Philadelphia metropolitan area and Delaware. Our Chicagoland dockside casinos, Harrah’s Joliet in Joliet, Illinois, and Horseshoe Hammond in Hammond, Indiana, draw customers primarily from the greater Chicago metropolitan area. In southern Indiana, we own Horseshoe Southern Indiana, a dockside casino complex located in Elizabeth, Indiana, which draws customers primarily from northern Kentucky, including the Louisville metropolitan area, and southern Indiana, including Indianapolis. In Louisiana, we own Harrah’s New Orleans, a land-based casino located in downtown New Orleans, which attracts customers primarily from the New Orleans metropolitan area. In northwest Louisiana, Horseshoe Bossier City, a dockside casino, and Harrah’s Louisiana Downs, a thoroughbred racetrack with slot machines, both located in Bossier City, cater to customers in northwestern Louisiana and east Texas, including the Dallas/Fort Worth metropolitan area. On the Mississippi gulf coast, we own the Grand Casino Biloxi, located in Biloxi, Mississippi, which caters to customers in southern Mississippi, southern Alabama, and northern Florida. Harrah’s North Kansas City dockside casino draws customers from the Kansas City metropolitan area. Harrah’s Metropolis is a dockside casino located in Metropolis, Illinois, on the Ohio River, drawing customers from southern Illinois, western Kentucky, and central Tennessee. Horseshoe Tunica, Harrah’s Tunica, and Tunica Roadhouse Hotel & Casino, dockside casino complexes located in Tunica, Mississippi, are approximately 30 miles from Memphis, Tennessee and draw customers primarily from the Memphis area and, to a lesser extent, from throughout the U.S. via charter aircraft. Horseshoe Casino and Bluffs Run Greyhound Park, a land-based casino and pari-mutuel facility, and Harrah’s Council Bluffs Casino & Hotel, a dockside casino facility, are located in Council Bluffs, Iowa, across the Missouri River from Omaha, Nebraska. At Horseshoe Casino and Bluffs Run Greyhound Park, we own the assets other than gaming equipment, and lease these assets to the Iowa West Racing Association, or IWRA, a nonprofit corporation, and we manage the facility for the IWRA under a management agreement expiring in October 2024. Iowa law requires that a qualified nonprofit corporation hold Bluffs Run’s gaming and pari-mutuel licenses and own its gaming equipment. The license to operate Harrah’s Council Bluffs Casino & Hotel is held jointly with IWRA, the qualified sponsoring organization. The Sponsorship and Operations Agreement between IWRA and us terminates on December 31, 2015, subject to our option to extend the term of the agreement for five succeeding three year terms, provided we are not in default. The Conrad Resort & Casino located in Punta Del Este, Uruguay (the “Conrad”), draws customers primarily from Argentina and Uruguay. In November 2012, the Company announced that it had entered into a definitive agreement with Enjoy S.A. ("Enjoy") to form a strategic relationship in Latin America. Under the terms of the agreement, Enjoy will acquire 45% of Baluma S.A., our subsidiary which owns and operates the Conrad, and we will become a 10% shareholder in Enjoy upon consummation of the agreement. Upon the closing of the transaction, which is subject to certain conditions, including the receipt of all regulatory and governmental approvals, Enjoy will assume primary responsibility for management of the Conrad. Enjoy will have the option to acquire the remaining stake in Baluma S.A. between years three and five following closing. The closing of the transaction remains subject to a number of conditions, including regulatory and governmental approvals in both Uruguay and Chile. We own four casinos in London: the Sportsman, the Golden Nugget, The Playboy Club London, and The Casino at the Empire. Our casinos in London draw customers primarily from the London metropolitan area as well as international visitors. We also own Alea Nottingham, Alea Glasgow, Alea Leeds, Manchester 235, Rendezvous Brighton, and Rendezvous Southend-on-Sea in the provinces of the United Kingdom, which primarily draw customers from their local areas. Pursuant to a concession agreement, we also operate two casinos in Cairo, Egypt, The London Club Cairo (which is located at the Ramses Hilton) and Caesars Cairo (which is located at the Four Seasons Cairo), which draw customers primarily from other countries in the Middle East. Emerald Safari, located in the province of Gauteng in South Africa, draws customers primarily from South Africa. We closed our Alea Leeds casino on March 4, 2013. We own and operate Bluegrass Downs, a harness racetrack located in Paducah, Kentucky. 4 We earn fees through our management of three casinos for Indian tribes: We also earn fees through our management of the following casinos: As more fully discussed in Note 3 , " Acquisitions, Investments, Dispositions and Divestitures ," in Item 8 of this report, in August 2012, we sold a 53.39% interest in Thistledown Racetrack, LLC (“Thistledown”), a thoroughbred racing facility in Cleveland, Ohio, to Rock Gaming and contributed the remaining 46.61% interest in Thistledown to ROC in exchange for additional equity interests in ROC. ROC wholly owns the operation and once it commences video lottery terminal ("VLT") operations we will manage the property for a fee under a management agreement that will expire on the 20th anniversary of commencing such VLT operations. In May 2012, we also contributed our 50% interest in Turfway Park LLC which is the owner of the Turfway Park thoroughbred racetrack in Boone County, Kentucky, to ROC in exchange for additional equity interests in ROC. Immediately subsequent to these transactions, Rock Gaming purchased a portion of equity interests in ROC from us in order to retain their 80% ownership interest in ROC. Turfway Park LLC, also owns a minority interest in Kentucky Downs LLC, which is the owner of the Kentucky Downs racetrack located in Simpson County, Kentucky. We have a minority interest in Sterling Suffolk Racecourse, LLC ("Suffolk Downs"), which owns a horse-racing track in Boston, Massachusetts, and the right to manage a potential future gaming facility. During 2012 , the Company acquired a $28.1 million preferred equity interest in Suffolk Downs. In July 2012, a consortium led by the Company was awarded the license to operate a casino in downtown Baltimore, Maryland. In October 2012, Caesars entered into definitive agreements with Rock Gaming, CVPR Gaming Holdings, LLC, The Stronach Group and Brown Capital Management to form a venture that will build and own the casino. Subject to regulatory approvals and receipt of project financing, Caesars expects to begin construction of the casino in the first half of 2013 and to open the casino in the middle of 2014. Caesars Interactive Entertainment, Inc. ("CIE"), which is a majority-owned subsidiary of Caesars Entertainment, owns the World Series of Poker ("WSOP") tournaments, and we license trademarks for a variety of products and businesses related to this brand. We also offer real money online gaming in the United Kingdom under the WSOP and Caesars brands, as well as alliances with online poker providers in France and Italy. In addition, we offer online “play for fun” casino genre games to residents globally online, through Facebook and other social networks, and on iOS and Android mobile devices. In December 2012, CIE received an interactive operator's license for online poker in Nevada. Going forward, we intend to offer real money gaming in jurisdictions where it is legal. We also own and operate a golf course on 175 acres of prime real estate through a land concession on the Cotai strip in Macau. In the fourth quarter of 2012, we began discussions with interested investors on a sale of the entities holding the land concession. We cannot assure you that we will be able to sell the entities holding the land concession, if at all. Additional information about our casino entertainment properties is set forth below in Item 2, “Properties.” 5 • Harrah’s Phoenix Ak-Chin, located near Phoenix, Arizona, which we manage for the Ak-Chin Indian Community under a management agreement that expires in December 2014. Harrah’s Phoenix Ak-Chin draws customers from the Phoenix metropolitan area; • Harrah’s Cherokee Casino and Hotel, which we manage for the Eastern Band of Cherokee Indians on their reservation in Cherokee, North Carolina under a management contract that expires in November 2018. Harrah’s Cherokee draws customers from eastern Tennessee, western North Carolina, northern Georgia and South Carolina; and • Harrah’s Rincon Casino and Resort, located near San Diego, California, which we manage for the Rincon San Luiseno Band of Mission Indians under a management agreement that expires in November 2013. Harrah’s Rincon draws customers from the San Diego metropolitan area and Orange County, California. • We manage Caesars Windsor, located in Windsor, Ontario, which draws customers primarily from the Detroit metropolitan area. • Horseshoe Cleveland casino in Ohio, which we manage for Rock Ohio Caesars LLC (“ROC”), a venture with Rock Ohio Ventures, LLC (“Rock Gaming”), in which we have a 20% equity interest. We manage the property for a fee under a management agreement that expires in May 2032. • Subsequent to its opening on March 4, 2013, we manage the Horseshoe Cincinnati casino in Ohio for ROC for a fee under a management agreement that will expire in March 2033. Sales and Marketing We believe that our North American distribution system of casino entertainment provides us the ability to capture a disproportionate share of our customers’ entertainment wallet when they travel among markets, which is core to our cross-market strategy. In addition, we have several multi-property markets like Las Vegas, Atlantic City, and Tunica, and we have seen increased revenue from customers visiting multiple properties in the same market. We believe our industry-leading customer loyalty program, Total Rewards, in conjunction with this distribution system, allows us to capture a growing share of our customers’ entertainment budget and compete more effectively. Our Total Rewards program is structured in tiers, providing customers an incentive to consolidate their entertainment spend at our casinos. Total Rewards customers are able to earn Reward Credits at essentially all of our casino entertainment facilities located in the U.S. and Canada for on-property entertainment expenses, including gaming, hotel, dining, and retail shopping. Total Rewards members can also redeem Reward Credits for on-property amenities or other off-property items such as merchandise, gift cards, and travel. Depending on their level of play with us in a calendar year, customers earn status within the Total Rewards program, designated as Gold, Platinum, Diamond, or Seven Stars customers, each with increasing sets of benefits and privileges. Separately, customers are provided promotional offers and rewards based on the ways that they choose to engage with us. These benefits encourage new customers to join Total Rewards and provide existing customers with incentives to consolidate their entertainment spend at our casinos. We have developed a database containing information about our customers, aspects of their casino gaming play, and their preferred spending choices outside of gaming. We use this information for marketing promotions, including through direct mail campaigns, the use of electronic mail, our website, mobile devices, social media, and interactive slot machines. Patents and Trademarks The development of intellectual property is part of our overall business strategy, and we regard our intellectual property to be an important element of our success. While our business as a whole is not substantially dependent on any one patent or combination of several of our patents or other intellectual property, we seek to establish and maintain our proprietary rights in our business operations and technology through the use of patents, copyrights, trademarks, and trade secret laws. We file applications for and obtain patents, copyrights, and trademarks in the United States and in foreign countries where we believe filing for such protection is appropriate. We also seek to maintain our trade secrets and confidential information by nondisclosure policies and through the use of appropriate confidentiality agreements. At December 31, 2012, we had 28 active U.S. cases (22 issued patents, 6 pending) and 8 active foreign cases (5 issued patents, 3 pending). The U.S. cases have patent terms that variously expire between 2015 and 2030. We have not applied for patents or the registration of all of our technology or trademarks, as the case may be, and may not be successful in obtaining the patents and trademarks for which we have applied. Despite our efforts to protect our proprietary rights, parties may infringe our patents and use information that we regard as proprietary, and our rights may be invalidated or unenforceable. The laws of some foreign countries do not protect proprietary rights to as great an extent as do the laws of the United States. In addition, others may be able independently to develop substantially equivalent intellectual property. We hold the following trademarks used in this document: Harrah's, Caesars, Grand Biloxi, Bally's, Flamingo, Paris, Caesars Palace, Rio, Showboat, Bill's, Harveys, Total Rewards, Bluffs Run, Louisiana Downs, Reward Credits, Horseshoe, Seven Stars, Slotomania, Tunica Roadhouse, The Quad Resort & Casino, WSOP and World Series of Poker. Trademark rights are perpetual provided that the mark remains in use by us. In addition, we hold a trademark license for Planet Hollywood used in connection with the Planet Hollywood Resort & Casino in Las Vegas, NV, which will expire on February 19, 2045. We consider all of these marks, and the associated name recognition, to be valuable to our business. 6 Competition The casino entertainment business is highly competitive and characterized by competitors that vary considerably by their size, quality of facilities, number of operations, brand identities, marketing and growth strategies, financial strength and capabilities, level of amenities, management talent, and geographic diversity. In most markets, we compete directly with other casino facilities operating in the immediate and surrounding market areas. In some markets, we face competition from nearby markets in addition to direct competition within our market areas. In addition, internet gaming could create additional competition for us and could adversely affect our operations. We also compete with other non-gaming resorts and vacation areas, with various other entertainment businesses, and with other forms of gaming, such as lotteries and internet gaming. Our competitors in each market that we participate may have substantially greater financial, marketing, or other resources than we do, and there can be no assurance that they will not, in the future, engage in aggressive pricing action to compete with us. Although we believe we are currently able to compete effectively in each of the various markets in which we participate, we cannot assure you that we will be able to continue to do so or that we will be capable of maintaining or further increasing our current market share. Our failure to compete successfully in our various markets could adversely affect our business, financial condition, results of operations, and cash flow. In recent years competition in existing markets has intensified. Many casino operators, including us, have invested in expanding existing facilities, such as our renovated and expanded facility in Hammond, Indiana, and our expansion at Caesars Palace in Las Vegas, developing new facilities, such as our new Horseshoe Cleveland and Horseshoe Cincinnati casinos, and acquiring established facilities in existing markets, such as our acquisition of Planet Hollywood in Las Vegas in 2010. This expansion of existing casino entertainment properties, the increase in the number of properties, and the aggressive marketing strategies of many of our competitors has increased competition in many markets in which we compete, and this intense competition can be expected to continue. The expansion of casino entertainment into new markets presents competitive issues for us which have had a negative impact on our financial results. In particular, our businesses have been adversely impacted by the additional gaming and room capacity in Nevada, New Jersey, New York, Connecticut, Pennsylvania, Mississippi, Missouri, Maryland, Michigan, Indiana, Iowa, Kansas, Illinois, Ohio, Louisiana, Ontario, South Africa, Uruguay, United Kingdom and Egypt. In addition, our operations located in New Jersey may be adversely impacted by the expansion of gaming in Maryland, New York and Pennsylvania, and our operations located in Nevada may be adversely impacted by the expansion of gaming in California. Several states and Indian tribes are also considering enabling the development and operation of gaming facilities in their jurisdictions. The casino entertainment industry is also subject to political and regulatory uncertainty. See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Consolidated Operating Results” and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations “—Regional Operating Results.” Summary of 2012 Events Development Transactions Octavius Tower at Caesars Palace Las Vegas In January 2012, we opened 662 additional rooms in the Octavius Tower at Caesars Palace Las Vegas. In November 2012, we opened three high-end villas in the Octavius Tower. Chester Downs In January 2012, we acquired an additional 4.5% in Chester Downs and Marina, LLC ("Chester Downs"), for $9.6 million, bringing our ownership interest in Chester Downs to 99.5%. Horseshoe Cleveland In May 2012, Rock Ohio Caesars LLC (“ROC”) opened the 96,000 square foot Horseshoe Cleveland casino, located in downtown Cleveland, Ohio, which we manage for ROC under a management agreement. Windsor Casino Limited In June 2012, we increased our ownership interest in Windsor Casino Limited, the employer of record and which formerly operated Caesars Windsor located in Windsor, Ontario, from 50% to 100%. The property is operated by Caesars Entertainment Windsor Limited. 7 Horseshoe Baltimore In July 2012, a consortium led by Caesars was awarded a license to operate a casino in downtown Baltimore, Maryland. In October 2012, we formed a venture that will build and own the casino. Subject to regulatory approvals and receipt of project financing, we expect to begin construction of the casino in the first half of 2013 and to open the casino in the middle of 2014. Thistledown In August 2012, we sold a portion of our equity interest in Thistledown to Rock Gaming and contributed the remaining equity interest in Thistledown to ROC in exchange for additional equity interests in ROC. Immediately subsequent to this transaction, Rock Gaming purchased a portion of equity interests in ROC from us in order to retain their 80% ownership interest in ROC. Once Thistledown commences VLT operations we will manage the property for a fee under a management agreement. Sale of Harrah's St. Louis Casino In November 2012, we sold our Harrah's St. Louis casino to Penn National Gaming, Inc. for $610.0 million. Conrad Punta Del Este Resort and Casino In November 2012, we entered into a definitive agreement with Enjoy S.A. (“Enjoy”) to form a strategic relationship in Latin America. Enjoy will acquire 45% of Baluma S.A., our subsidiary which owns and operates the Conrad, for approximately $140 million in cash and stock. We will become a 10% shareholder in Enjoy and Enjoy will assume primary responsibility for management of the property. Enjoy will have the option to acquire the remaining stake in Baluma S.A. in the future. The closing of the transaction remains subject to a number of conditions, including regulatory and governmental approvals in both Uruguay and Chile. Buffalo Studios, LLC In December 2012, we purchased substantially all of the net assets of Buffalo Studios, LLC, a social and mobile games developer and owner of Bingo Blitz . Suffolk Downs During 2012, the Company acquired a $28.1 million preferred equity interest in Sterling Suffolk Racecourse, LLC, which owns a horse-racing track in Massachusetts. Project Linq During 2012, we continued construction on Project Linq, a dining, entertainment, and retail development between the Flamingo casino and The Quad Resort & Casino, on the east side of the Las Vegas Strip, which is scheduled to open in phases beginning in late 2013. Project Linq also includes the construction of a 550-foot observation wheel, the High Roller, which is expected to open in early 2014. Financing Transactions Chester Downs Notes In February 2012, Chester Downs issued $330.0 million aggregate principal amount of 9.25% senior secured notes due 2020 and used $232.4 million of the proceeds of the notes to repay its existing term loan, and distributed the remaining proceeds to Chester Downs' managing member, a subsidiary of Caesars. Caesars Public Offering In February 2012, CEC offered 1.8 million shares of its common stock in a public offering (the “Public Offering”), at $9.00 per share. As the result of the Public Offering, our common stock trades on NASDAQ under the symbol “CZR.” In connection with the Public Offering, the Company effected a 1.742-for-one split of its common stock. 8 Bill's Credit Facility In November 2012, we entered into a $185.0 million, seven-year senior secured credit facility to fund the renovation of Bill's Gamblin' Hall & Saloon into a boutique lifestyle hotel that includes a dayclub/nightclub. The renovation will include a complete remodeling of the guest rooms, casino floor, and common areas, the addition of a second floor restaurant, and the construction of an approximately 65,000 square foot rooftop pool and dayclub/nightclub. The Company will own the property and manage the casino, hotel, and food and beverage operations, and the dayclub/nightclub will be leased to a third party. Bill's Gamblin' Hall & Saloon temporarily closed in early February 2013 to accommodate these renovations. The renovated hotel, casino, and restaurant are expected to open in December 2013 and the dayclub/nightclub is expected to open in April 2014. CEOC Bond Offerings During 2012, CEOC completed offerings of $1,250.0 million aggregate principal amount of 8.5% senior secured notes and $1,500.0 million aggregate principal amount of 9% senior secured notes due 2020, $750.0 million of which was held in escrow at December 31, 2012 and released in 2013 upon the satisfaction of certain conditions. CEOC Credit Facilities During 2012, we (i) extended the maturity of $3,812.3 million B-1, B-2 and B-3 term loans held by consenting lenders from January 28, 2015 to January 28, 2018 and increased the interest rate with respect to such extended term loans (the “Term B-6 Loans”), (ii) converted $457.8 million original maturity revolver commitments held by consenting lenders to Term B-6 Loans and promptly following such conversion, repaid $1,574.3 million of term loans held by any consenting lender, (iii) extended the maturity of $37.2 million original maturity revolver commitments held by consenting lenders who elected not to convert their commitments to term loans from January 28, 2014 to January 28, 2017 and increased the interest rate and the undrawn commitment fee with respect to such extended revolver commitments, and upon the effectiveness of such extension, terminated $798.5 million of revolver commitments and increased the amount of outstanding Term B-6 Loans by $2,853.8 million, and (iv) modified certain other provisions of the senior secured credit facilities (the "Credit Facilities"). The Term B-6 Loans have a springing maturity to April 14, 2017 if more than $250.0 million of CEOC's 11.25% senior secured notes due 2017 remain outstanding on April 14, 2017. CMBS Loans During 2012, we purchased $367.3 million of face value of commercial mortgage-backed securities (“CMBS”) Loans for $229.3 million, recognizing a gain of $135.0 million, net of deferred financing costs. Transactions with Rock Gaming In 2012, Rock Gaming made an investment in CIE whereby it purchased 6,155 shares of CIE common stock for $30.4 million. In addition, during 2012 CIE issued non-interest bearing convertible promissory notes with principal totaling $47.7 million to Rock Gaming that are convertible into approximately 8,913 shares of CIE common stock. Summary of 2013 Events Horseshoe Cincinnati In March 2013, ROC opened the 100,000 square foot Horseshoe Cincinnati casino in Cincinnati, Ohio, which we manage for ROC under a management agreement. CEOC Financing Transactions In January and February 2013, CEOC converted $267.8 million aggregate principal amount of original maturity revolver commitments held by consenting lenders to Term B-6 Loans, repaid $133.9 million principal amount of term loans of extending lenders, terminated $267.8 million principal amount of revolving commitments of extending lenders, and increased the amount of outstanding Term B-6 Loans by $133.9 million. In February 2013, CEOC completed the offering of $1,500.0 million aggregate principal amount of 9% senior secured notes due 2020, the proceeds of which we plan to repay a portion of CEOC's existing term loans at par. The proceeds of this offering are held in escrow pending the satisfaction of certain conditions, including receipt of all regulatory approvals. 9 Governmental Regulation The gaming industry is highly regulated, and we must maintain our licenses and pay gaming taxes to continue our operations. Each of our casinos is subject to extensive regulation under the laws, rules, and regulations of the jurisdiction where it is located. These laws, rules, and regulations generally concern the responsibility, financial stability, and character of the owners, managers, and persons with financial interests in the gaming operations. Violations of laws in one jurisdiction could result in disciplinary action in other jurisdictions. A more detailed description of the regulations to which we are subject is contained in Exhibit 99.3 to this Form 10-K. Our businesses are subject to various foreign, federal, state, and local laws and regulations, in addition to gaming regulations. These laws and regulations include, but are not limited to, restrictions and conditions concerning alcoholic beverages, environmental matters, employees, currency transactions, taxation, zoning and building codes, and marketing and advertising. Such laws and regulations could change or could be interpreted differently in the future, or new laws and regulations could be enacted. Material changes, new laws or regulations, or material differences in interpretations by courts or governmental authorities could adversely affect our operating results. Employee Relations We have approximately 68,000 employees through our various subsidiaries. Approximately 28,000 employees are covered by collective bargaining agreements with certain of our subsidiaries, relating to certain casino, hotel and restaurant employees at certain of our properties. Most of our employees covered by collective bargaining agreements are located at our properties in Las Vegas and Atlantic City. Our collective bargaining agreements with employees located at our Atlantic City properties expire at various times throughout 2014 and 2016 and our collective bargaining agreements with our employees located at our Las Vegas properties expire at various times throughout 2013. A number of labor contracts expired in 2012, and the Company is actively engaged in bargaining with the respective unions with regard to those contracts. Available Information Our Internet address is www.caesars.com. We make available free of charge, on or through our website, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (the “SEC”). We also make available through our website all filings of our executive officers and directors on Forms 3, 4, and 5 under Section 16 of the Exchange Act. These filings are also available on the SEC’s website at www.sec.gov. Our Code of Business Conduct and Ethics for Principal Officers is available on our website under the “Investor Relations” link. We will provide a copy of these documents without charge to any person upon receipt of a written request addressed to Caesars Entertainment Corporation, Attn: Corporate Secretary, One Caesars Palace Drive, Las Vegas, Nevada 89109. Reference in this document to our website address does not constitute incorporation by reference of the information contained on the website. ITEM 1A. Risk Factors Our substantial indebtedness and the fact that a significant portion of our cash flow is used to make interest payments could adversely affect our ability to raise additional capital to fund our operations and limit our ability to react to changes in the economy or our industry. We are a highly leveraged company. As of December 31, 2012 , we had $24,103.1 million face value of outstanding indebtedness and our current debt service obligation for the next 12 months is $2,848.2 million , which includes required interest payments of $1,943.1 million . As of December 31, 2012 , CEOC had $21,045.3 million face value of outstanding indebtedness including $516.4 million owed to Caesars Entertainment, and CEOC’s debt service obligation for the next 12 months is $2,758.8 million , which includes required interest payments of $1,857.3 million . 10 In January and February 2013, CEOC converted $267.8 million aggregate principal amount of original maturity revolver commitments held by consenting lenders to Term B-6 Loans, repaid $133.9 million principal amount of term loans of extending lenders, terminated $267.8 million principal amount of revolving commitments of extending lenders, and increased the amount of outstanding Term B-6 Loans by $133.9 million. Also in February 2013, CEOC amended its Credit Facilities to, among other things: (i) use the net cash proceeds of the February 2013 notes offering to repay a portion of CEOC's existing term loans at par, with such repayment being applied: first, to all outstanding B-1, B-2, and B-3 term loans held by consenting lenders; second, to B-5 and B-6 term loans held by consenting lenders, in an amount up to 20% of the principal amount of the B-5 and B-6 term loans; and third, if any proceeds remain outstanding, to outstanding term loans as CEOC elects in its discretion; (ii) obtain up to $75 million of extended revolving facility commitments with a maturity of January 28, 2017, (iii) increase the accordion capacity under the Credit Facilities by an additional $650 million, (iv) modify the calculation of the senior secured leverage ratio for purposes of the maintenance test under the Credit Facilities to exclude the February 2013 notes, and (v) modify certain other provisions of the Credit Facilities. The full terms of these transactions are described in Note 21 , " Subsequent Events ," to the consolidated financial statements included in Item 8 of this report. The closing of the amendment transaction is subject to certain conditions, including required regulatory approvals. Our substantial indebtedness could: Despite our substantial indebtedness, we may still be able to incur significantly more debt. This could intensify the risks described above. We and our subsidiaries may be able to incur substantial indebtedness at any time, and from time to time, including in the near future. Although the terms of the agreements governing our indebtedness contain restrictions on our ability to incur additional indebtedness, these restrictions are subject to a number of important qualifications and exceptions, and the indebtedness incurred in compliance with these restrictions could be substantial. For example, as of December 31, 2012 , we had $317.7 million of additional borrowing capacity available under our revolving credit facility with an additional $90.6 million committed to back outstanding letters of credit, all of which is secured on a first priority basis. None of our existing indebtedness limits the amount of debt that may be incurred by Caesars Entertainment. Our Credit Facilities allow for one or more future issuances of additional secured notes or loans, which may include, in each case, indebtedness secured on a pari passu basis with the obligations under the Credit Facilities and our first lien notes. This indebtedness could be used for a variety of purposes, including financing capital expenditures, refinancing or repurchasing our outstanding indebtedness, including existing unsecured indebtedness, or for general corporate purposes. We have raised and expect to continue to raise debt, including secured debt, to directly or indirectly refinance our outstanding unsecured debt on an opportunistic basis, as well as development and acquisition opportunities. 11 • limit our ability to borrow money for our working capital, capital expenditures, development projects, debt service requirements, strategic initiatives or other purposes; • make it more difficult for us to satisfy our obligations with respect to our indebtedness, and any failure to comply with the obligations of any of our debt instruments, including restrictive covenants and borrowing conditions, could result in an event of default under the agreements governing our indebtedness; • require us to dedicate a substantial portion of our cash flow from operations to the repayment of our indebtedness thereby reducing funds available to us for other purposes; • limit our flexibility in planning for, or reacting to, changes in our operations or business; • make us more highly leveraged than some of our competitors, which may place us at a competitive disadvantage; • make us more vulnerable to downturns in our business or the economy; • restrict us from making strategic acquisitions, developing new gaming facilities, introducing new technologies or exploiting business opportunities; affect our ability to renew gaming and other licenses; • limit, along with the financial and other restrictive covenants in our indebtedness, among other things, our ability to borrow additional funds or dispose of assets; and • expose us to the risk of increased interest rates as certain of our borrowings are at variable rates of interest. We may be unable to generate sufficient cash to service all of our indebtedness, and may be forced to take other actions to satisfy our obligations under our indebtedness that may not be successful. If we are unable to satisfy or refinance our debt obligations as they come due, we cannot assure you that your investment in our company will retain any value. Our ability to satisfy our debt obligations will depend upon, among other things: We may be unable to generate sufficient cash flow from operations, or unable to draw under our Credit Facilities or otherwise, in an amount sufficient to fund our liquidity needs. Our ability to restructure or refinance our debt will depend on the condition of the capital markets and our financial condition at such time. As of December 31, 2012 , $6.8 billion face value of our indebtedness is scheduled to mature in 2015 (assuming the extension options with respect to the CMBS Financing and PHW Las Vegas senior secured loan are exercised), representing 28% of the total face value of our debt. For a discussion of our debt maturities, see “Management's Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources-Guarantees of Third-Party Debt and Other Obligations and Commitments-Contractual Obligations.” We do not expect that our cash flow from operations will be sufficient to repay this indebtedness, and we will have to seek a refinancing. We cannot predict at this time whether we will be able to secure any such refinancing, even if market conditions and our financial condition improve between now and then. Even if refinancing alternatives were available to us, we may not find them suitable or at comparable interest rates to the indebtedness being refinanced. In addition, the terms of existing or future debt agreements may restrict us from securing a refinancing on terms that are available to us at that time. In the absence of such operating results and resources, we would face substantial liquidity problems and would likely be required to dispose of material assets or operations to meet our debt service and other obligations. We may not be able to consummate those dispositions for fair market value or at all. Furthermore, any proceeds that we could realize from any such dispositions may not be adequate to meet our debt service obligations then due. We could also be required to reorganize our Company in its entirety. CEC is pursuing a strategic transaction that contemplates the transfer of certain of its assets that are not part of the collateral package for the Credit Facilities or the secured notes issued by CEOC, including unencumbered assets of CEC and unrestricted subsidiaries of CEOC, to a newly created entity, named Caesars Growth Venture Partners ("CGVP"), which is anticipated to be controlled by common parties that control CEC. CGVP would be a growth oriented vehicle focused on projects that are complementary to CEC's existing properties. We anticipate that CEC would own a significant portion of CGVP's equity interests and that subsidiaries of CEC would manage new casino properties owned by CGVP. We are pursuing this transaction because we believe it will improve our liquidity and credit profile, enhance our distribution network and provide additional support for potential new ventures. It is currently contemplated that the following assets would be transferred: (i) Planet Hollywood, (ii) investment in a casino project under development in Baltimore, Maryland, (iii) interest in a portion of the management fee revenues of the management companies for Planet Hollywood and the casino to be developed in Baltimore, Maryland, (iv) shares of Caesars Interactive Entertainment, Inc.'s outstanding common stock held by HIE Holdings, Inc., a subsidiary of CEC, and (v) approximately $1.1 billion face value of senior notes issued by CEOC held by Harrah's BC, Inc. It is anticipated the Sponsors would participate in the transaction and that CEC's other shareholders would have the opportunity to participate on the same terms as the Sponsors. The form of consideration to CEC is expected to be equity interests and cash, and any consideration to CEOC is expected to be cash, in each case at fair value. There is no current intention that this transaction will involve CEC's outstanding CMBS financing. There are no commitments with respect to any such transaction and there have been no agreements with respect to price or value. The transfer of such assets would require the approval of regulators and other third parties, which we may not be able to obtain. Therefore, we cannot assure you that any such transaction will be entered into or consummated or, if consummated, describe the impact the transaction would have on us. Neither the Sponsors nor any of their respective affiliates has any continuing obligation to provide us with debt or equity financing. Even if we are able to refinance our debt, any refinancing could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. For example, the interest rates on our first and second lien notes are substantially higher than the interest rates under our Credit Facility. If we are unable to service our debt obligations generally, and if we are unable to refinance our debt obligations that mature in 2015 or thereafter, we cannot assure you that our company will continue in its current state or that your investment in our company will retain any value. 12 • our 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 our control; and • our future ability to borrow under our Credit Facilities, the availability of which depends on, among other things, our complying with the covenants in our Credit Facilities. Our debt agreements contain restrictions that limit our flexibility in operating our business. Our Credit Facilities, the CMBS mortgage loan and/or related mezzanine loans the (“CMBS Loans”), the indentures governing most of our existing notes, the senior secured loans related to the development of Octavius Tower at Caesars Palace Las Vegas and Project Linq, the senior secured loan of PHW Las Vegas, LLC, the senior secured notes of Chester Downs and the senior secured loans related to the redevelopment of Bill's Gamblin' Hall & Saloon contain, and any future indebtedness of ours would likely contain, a number of covenants that impose significant operating and financial restrictions on us, including restrictions on our and our subsidiaries' ability to, among other things: As a result of these covenants, we are limited in the manner in which we conduct our business, and we may be unable to engage in favorable business activities or finance future operations or capital needs. We have pledged and will pledge a significant portion of our assets as collateral under our Credit Facilities, our CMBS Loans, our first lien notes, our second lien notes, the senior secured loan of PHW Las Vegas, LLC, the senior secured loan related to the developments of the Octavius Tower at Caesars Palace Las Vegas, Bill's Gamblin' Hall & Saloon, and a retail, dining and entertainment corridor located between The Quad Resort & Casino and the Flamingo Las Vegas on the Las Vegas strip ("Project Linq"), or the senior secured notes of Chester Downs. If any of these lenders accelerate the repayment of borrowings, there can be no assurance that we will have sufficient assets to repay our indebtedness. Under our Credit Facilities, we are required to satisfy and maintain specified financial ratios. Specifically, our Credit Facilities requires us to maintain a senior secured leverage ratio of no more than 4.75 to 1.0 , which is the ratio of our senior first priority secured debt to LTM Adjusted EBITDA - Pro Forma - CEOC Restricted. This ratio excludes up to $2,200.0 million of first priority senior secured notes and up to $350.0 million aggregate principal amount of consolidated debt of subsidiaries that are not wholly-owned. This ratio also reduces the amount of senior first priority secured debt by the amount of unrestricted cash on hand. As of December 31, 2012, the senior secured leverage ratio was 4.44 to 1.0. In addition, under certain circumstances, our Credit Facilities allow us to apply cash contributions received by us as an increase to LTM Adjusted EBITDA - Pro Forma - CEOC Restricted if we are unable to meet our senior secured leverage ratio. Many factors affect our continuing ability to comply with the covenant, including (a) changes in gaming trips, spend per trip and hotel metrics, which are correlated to a consumer recovery, (b) increases in cost-savings actions, (c) asset sales, (d) issuing additional second lien or unsecured debt, (e) equity financings, (f) delays in investments in new developments, or (g) a combination thereof. Our ability to meet those financial ratios can be affected by events beyond our control, and there can be no assurance that we will meet those ratios. A failure to comply with the covenants contained in our Credit Facilities or our other indebtedness could result in an event of default under the facilities or the existing agreements, which, if not cured or waived, could have a material adverse effect on our business, financial condition and results of operations. In the event of any default under our Credit Facilities or our other indebtedness, the lenders thereunder: Such actions by the lenders could cause cross defaults under our other indebtedness. If we were unable to repay those amounts, the lenders under our Credit Facilities, our CMBS Loans and our first and second lien notes could proceed against the collateral granted to them to secure that indebtedness. 13 • incur additional debt or issue certain preferred shares; • pay dividends on or make distributions in respect of our capital stock or make other restricted payments; • make certain investments; • sell certain assets; • create liens on certain assets; • consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; • enter into certain transactions with our affiliates; and • designate our subsidiaries as unrestricted subsidiaries. • will not be required to lend any additional amounts to us; • could elect to declare all borrowings outstanding, together with accrued and unpaid interest and fees, to be due and payable and terminate all commitments to extend further credit; or • require us to apply all of our available cash to repay these borrowings. If the indebtedness under our first and second lien notes, Credit Facilities, CMBS Loans or our other indebtedness were to be accelerated, there can be no assurance that our assets would be sufficient to repay such indebtedness in full. We are controlled by the Sponsors, whose interests may not be aligned with ours. Hamlet Holdings, the members of which are comprised of an equal number of individuals affiliated with each of the Sponsors, beneficially owns approximately 69.9% of our common stock pursuant to an irrevocable proxy providing Hamlet Holdings with sole voting and sole dispositive power over those shares. As a result, the Sponsors have the power to elect all of our directors. Therefore, the Sponsors have the ability to vote on any transaction that requires the approval of our Board or our stockholders, including the approval of significant corporate transactions such as mergers and the sale of substantially all of our assets. The interests of the Sponsors could conflict with or differ from the interests of other holders of our securities. For example, the concentration of ownership held by the Sponsors could delay, defer or prevent a change of control of us or impede a merger, takeover or other business combination which another stockholder may otherwise view favorably. Additionally, the Sponsors are in the business of making or advising on investments in companies it holds, and may from time to time in the future acquire interests in or provide advice to businesses that directly or indirectly compete with certain portions of our business or are suppliers or customers of ours. One or both of the Sponsors may also pursue acquisitions that may be complementary to our business, and, as a result, those acquisition opportunities may not be available to us. A sale of a substantial number of shares of stock in the future by funds affiliated with the Sponsors or their co-investors could cause our stock price to decline. So long as Hamlet Holdings continues to hold the irrevocable proxy, they will continue to be able to strongly influence or effectively control our decisions. In addition, we have an executive committee that serves at the discretion of our Board and is authorized to take such actions as it reasonably determines appropriate. Currently, the executive committee may act by a majority of its members, provided that at least one member affiliated with TPG and Apollo must approve any action of the executive committee. The downturn in the national economy over the past few years, the volatility and disruption of the capital and credit markets, and adverse changes in the global economy could negatively impact our financial performance and our ability to access financing. The severe economic downturn over the past few years and adverse conditions in the local, regional, national and global markets have negatively affected our operations, and may continue to negatively affect our operations in the future. During periods of economic contraction such as recently experienced, our revenues may decrease while most of our costs remain fixed and some costs even increase, resulting in decreased earnings. Gaming and other leisure activities we offer represent discretionary expenditures and participation in such activities may decline during economic downturns, during which consumers generally earn less disposable income. For example, key determinants of our revenues and operating performance include hotel Average Daily Rate ("ADR"), number of gaming trips and average spend per trip by our customers. Given that 2007 was the peak year for our financial performance and the gaming industry in the United States in general, we may not attain those financial levels in the near term, or at all. If we fail to increase ADR or any other similar metric in the near term, our revenues may not increase and, as a result, we may not be able to pay down our existing debt, fund our operations, fund planned capital expenditures or achieve expected growth rates, all of which could have a material adverse effect on our business, financial condition, results of operations and cash flow. Even an uncertain economic outlook may adversely affect consumer spending in our gaming operations and related facilities, as consumers spend less in anticipation of a potential economic downturn. Furthermore, other uncertainties, including national and global economic conditions, terrorist attacks or other global events, could adversely affect consumer spending and adversely affect our operations. 14 We may not realize any or all of our projected cost savings, which would have the effect of reducing our LTM Adjusted EBITDA - Pro Forma, which would have a negative effect on our results of operations and negatively impact our covenant calculation and could have a negative effect on our stock price. Beginning in the third quarter of 2008, we initiated a company-wide cost savings plan in an effort to align our expenses with current revenue levels. In addition, we embarked on Project Renewal in the fourth quarter of 2010 to identify the optimum way of structuring our business given our breadth and scale of product offerings. While these efforts have allowed us to realize substantial savings since we initiated our cost savings plan, our continued reduction efforts may fail to achieve similar or continued savings. Although we believe, as of December 31, 2012, once fully implemented, these cost savings programs will produce additional estimated annual cost savings of $212.8 million we may not realize some or all of these projected savings without impacting our revenues. Our cost savings plans are intended to increase our effectiveness and efficiency in our operations without impacting our revenues and margins. Our cost savings plan is subject to numerous risks and uncertainties that may change at any time, and, therefore, our actual savings may differ materially from what we anticipate. For example, cutting advertising or marketing expenses may have an unintended negative affect on our revenues. In addition, our expected savings from procurement of goods may be affected by unexpected increases in the cost of raw materials. Furthermore, because we use our projected yet-to-be realized cost savings as a pro forma adjustment to calculate our LTM Adjusted EBITDA - Pro Forma, our actual Adjusted EBITDA would be reduced to the extent of the cost savings we do not achieve. We are subject to extensive governmental regulation and taxation policies, the enforcement of which could adversely impact our business, financial condition, and results of operations. We are subject to extensive gaming regulations and political and regulatory uncertainty. Regulatory authorities in the jurisdictions where we operate have broad powers with respect to the licensing of casino operations and may revoke, suspend, condition or limit our gaming or other licenses, impose substantial fines and take other actions, any one of which could adversely impact our business, financial condition and results of operations. For example, revenues and income from operations were negatively impacted during July 2006 in Atlantic City by a three-day government-imposed casino shutdown. Furthermore, in many jurisdictions where we operate, licenses are granted for limited durations and require renewal from time to time. For example, in Iowa, our ability to continue our gaming operations is subject to a referendum every eight years or at any time upon petition of the voters in the county in which we operate; the most recent referendum which approved our ability to continue to operate our casinos occurred in November 2010. In Maryland, we will have to reapply for our license in 15 years. There can be no assurance that continued gaming activity will be approved in any referendum in the future. If we do not obtain the requisite approval in any future referendum, we will not be able to operate our gaming operations in Iowa, which would negatively impact our future performance. From time to time, individual jurisdictions have also considered legislation or referendums, such as bans on smoking in casinos and other entertainment and dining facilities, which could adversely impact our operations. For example, the City Council of Atlantic City passed an ordinance in 2007 requiring that we segregate at least 75% of the casino gaming floor as a nonsmoking area, leaving no more than 25% of the casino gaming floor as a smoking area. Illinois also passed the Smoke Free Illinois Act which became effective January 1, 2008, and bans smoking in nearly all public places, including bars, restaurants, work places, schools and casinos. The Act also bans smoking within 15 feet of any entrance, window or air intake area of these public places. These smoking bans have adversely affected revenues and operating results at our properties. The likelihood or outcome of similar legislation in other jurisdictions and referendums in the future cannot be predicted, though any smoking ban would be expected to negatively impact our financial performance. The casino entertainment industry represents a significant source of tax revenues to the various jurisdictions in which casinos operate. From time to time, various state and federal legislators and officials have proposed changes in tax laws, or in the administration of such laws, including increases in tax rates, which would affect the industry. If adopted, such changes could adversely impact our business, financial condition and results of operations. Our stockholders are subject to extensive governmental regulation and if a stockholder is found unsuitable by the gaming authority, that stockholder would not be able to beneficially own our common stock directly or indirectly. In many jurisdictions, gaming laws can require any of our stockholders to file an application, be investigated, and qualify or have his, her or its suitability determined by gaming authorities. Gaming authorities have very broad discretion in determining whether an applicant should be deemed suitable. Subject to certain administrative proceeding requirements, the gaming regulators have the authority to deny any application or limit, condition, restrict, revoke or suspend any license, registration, finding of suitability or approval, or fine any person licensed, registered or found suitable or approved, for any cause deemed reasonable by the gaming authorities. For additional information on the criteria used in making determinations regarding suitability, see “Governmental Regulation.” 15 For example, under Nevada gaming laws, each person who acquires, directly or indirectly, beneficial ownership of any voting security, or beneficial or record ownership of any non-voting security or any debt security, in a public corporation which is registered with the Nevada Gaming Commission, or the Gaming Commission, may be required to be found suitable if the Gaming Commission has reason to believe that his or her acquisition of that ownership, or his or her continued ownership in general, would be inconsistent with the declared public policy of Nevada, in the sole discretion of the Gaming Commission. Any person required by the Gaming Commission to be found suitable shall apply for a finding of suitability within 30 days after the Gaming Commission's request that he or she should do so and, together with his or her application for suitability, deposit with the Nevada Gaming Control Board, or the Control Board, a sum of money which, in the sole discretion of the Control Board, will be adequate to pay the anticipated costs and charges incurred in the investigation and processing of that application for suitability, and deposit such additional sums as are required by the Control Board to pay final costs and charges. Additionally, under Ohio law, an institutional investor, which is broadly defined and includes any corporation that holds any amount of our stock, will be required to apply for and obtain a waiver of suitability determination. Furthermore, any person required by a gaming authority to be found suitable, who is found unsuitable by the gaming authority, may not hold directly or indirectly the beneficial ownership of any voting security or the beneficial or record ownership of any nonvoting security or any debt security of any public corporation which is registered with the gaming authority beyond the time prescribed by the gaming authority. A violation of the foregoing may constitute a criminal offense. A finding of unsuitability by a particular gaming authority impacts that person's ability to associate or affiliate with gaming licensees in that particular jurisdiction and could impact the person's ability to associate or affiliate with gaming licensees in other jurisdictions. Many jurisdictions also require any person who acquires beneficial ownership of more than a certain percentage of voting securities of a gaming company and, in some jurisdictions, non-voting securities, typically 5%, to report the acquisition to gaming authorities, and gaming authorities may require such holders to apply for qualification or a finding of suitability, subject to limited exceptions for “institutional investors” that hold a company's voting securities for investment purposes only. Some jurisdictions may also limit the number of gaming licenses in which a person may hold an ownership or a controlling interest. In Indiana, for example, a person may not have an ownership interest in more than two Indiana riverboat owner's licenses. If we are unable to effectively compete against our competitors, our profits will decline. The gaming industry is highly competitive and our competitors vary considerably in size, quality of facilities, number of operations, brand identities, marketing, and growth strategies, financial strength and capabilities, level of amenities, management talent, and geographic diversity. We also compete with other non-gaming resorts and vacation areas, and with various other entertainment businesses. Our competitors in each market that we participate may have substantially greater financial, marketing, or other resources than we do, and there can be no assurance that they will not, in the future, engage in aggressive pricing action to compete with us. Although we believe we are currently able to compete effectively in each of the various markets in which we participate, we cannot assure you that we will be able to continue to do so or that we will be capable of maintaining or further increasing our current market share. Our failure to compete successfully in our various markets could adversely affect our business, financial condition, results of operations, and cash flow. In recent years, many casino operators have been reinvesting in existing markets to attract new customers or to gain market share, thereby increasing competition in those markets. As companies have completed new expansion projects, supply has typically grown at a faster pace than demand in some markets, including Las Vegas, our largest market, and competition has increased significantly. For example, CityCenter, a large development of resorts and residences, opened in December 2009 in Las Vegas, and Revel, a resort and casino in Atlantic City, opened in May 2012. The expansion of existing casino entertainment properties, the increase in the number of properties and the aggressive marketing strategies of many of our competitors have increased competition in many markets in which we operate, and this intense competition is expected to continue. These competitive pressures have and are expected to continue to adversely affect our financial performance in certain markets, including Atlantic City. In particular, our business may be adversely impacted by the additional gaming and room capacity in Nevada, New Jersey, New York, Connecticut, Pennsylvania, Mississippi, Missouri, Maryland, Michigan, Indiana, Iowa, Kansas, Illinois, Ohio, Louisiana, Ontario, South Africa, Uruguay, United Kingdom, Egypt, and/or other projects not yet announced which may be competitive in the other markets where we operate or intend to operate. Several states, such as Kentucky, Texas and Indian tribes are also considering enabling the development and operation of casinos or casino-like operations in their jurisdictions. In addition, our operations located in New Jersey may be adversely impacted by the expansion of gaming in Maryland, New York and Pennsylvania, and our operations located in Nevada may be adversely impacted by the expansion of gaming in California, respectively. 16 Use of the “Caesars” brand name, or any of our other brands, by entities other than us could damage the brands and our operations and adversely affect our business and results of operations. Our “Caesars” brand remains the most recognized casino brand in the world and our operations benefit from the global recognition and reputation generated by our brands. Generally and through Caesars Global Living, we are actively pursuing gaming and non-gaming management, branding, and development opportunities in Asia and other parts of the world where our brands and reputation are already well-recognized assets. In September 2011, we announced a management and branding agreement for a non-gaming development, whose equity will be provided by a third party, which will be called Caesars Palace Longmu Bay. In addition, we will continue to expand our World Series of Poker tournaments to international jurisdictions where we believe there is a likelihood of legalization of online gaming, in order to grow the brand’s awareness. In connection with such opportunities, we intend to grant third parties licenses to use our brands. Our business and results of operations may be adversely affected by the management or the enforcement of the “Caesars” and the “World Series of Poker” brand names, or any of our other brands, by third parties outside of our exclusive control. Any failure to protect our trademarks could have a negative impact on the value of our brand names and adversely affect our business. The development of intellectual property is part of our overall business strategy, and we regard our intellectual property to be an important element of our success. For example, we own and manage the World Series of Poker tournaments, and we license trademarks for a variety of products and businesses related to this brand. While our business as a whole is not substantially dependent on any one trademark or combination of several of our trademarks or other intellectual property, we seek to establish and maintain our proprietary rights in our business operations and technology through the use of patents, copyrights, trademarks and trade secret laws. We file applications for and obtain patents, copyrights and trademarks in the United States and in foreign countries where we believe filing for such protection is appropriate. We also seek to maintain our trade secrets and confidential information by nondisclosure policies and through the use of appropriate confidentiality agreements. Despite our efforts to protect our proprietary rights, parties may infringe our trademarks and use information that we regard as proprietary and our rights may be invalidated or unenforceable. The laws of some foreign countries do not protect proprietary rights to as great an extent as do the laws of the United States. Monitoring the unauthorized use of our intellectual property is difficult. Litigation may be necessary to enforce our intellectual property rights or to determine the validity and scope of the proprietary rights of others. Litigation of this type could result in substantial costs and diversion of resource. We cannot assure you that all of the steps we have taken to protect our trademarks in the United States and foreign countries will be adequate to prevent imitation of our trademarks by others. The unauthorized use or reproduction of our trademarks could diminish the value of our brand and our market acceptance, competitive advantages or goodwill, which could adversely affect our business. We extend credit to a portion of our customers and we may not be able to collect gaming receivables from our credit players. We conduct our gaming activities on a credit and cash basis at many of our properties. Any such credit we extend is unsecured. Table games players typically are extended more credit than slot players, and high-stakes players typically are extended more credit than customers who tend to wager lower amounts. High-end gaming is more volatile than other forms of gaming, and variances in win-loss results attributable to high-end gaming may have a significant positive or negative impact on cash flow and earnings in a particular quarter. We extend credit to those customers whose level of play and financial resources warrant, in the opinion of management, an extension of credit. These large receivables could have a significant impact on our results of operations if deemed uncollectible. While gaming debts evidenced by a credit instrument, including what is commonly referred to as a “marker,” and judgments on gaming debts are enforceable under the current laws of the jurisdictions in which we allow play on a credit basis and judgments in such jurisdictions on gaming debts are enforceable in all states under the Full Faith and Credit Clause of the U.S. Constitution, other jurisdictions may determine that enforcement of gaming debts is against public policy. Although courts of some foreign nations will enforce gaming debts directly and the assets in the U.S. of foreign debtors may be reached to satisfy a judgment, judgments on gaming debts from U.S. courts are not binding on the courts of many foreign nations. 17 The acquisition, development and construction of new hotels, casinos and gaming and non-gaming venues and the expansion of existing ones could have an adverse effect on our business, financial condition and results of operations due to various factors including delays, cost overruns and other uncertainties. We intend to develop, construct and open or acquire new hotels, casinos and other gaming venues, as well as develop and manage non-gaming venues, in response to opportunities that may arise. Future development projects and acquisitions may require significant capital commitments, the incurrence of additional debt, guarantees of third party debt, the incurrence of contingent liabilities and an increase in depreciation and amortization expense, which could have an adverse effect upon our business, financial condition, results of operations and cash flow. The development and construction of new hotels, casinos and gaming venues and the expansion of existing ones, such as our recent construction of the Octavius Tower and redevelopment of the Nobu Tower at Caesars Palace in Las Vegas, the planned redevelopment of Bill's Gamblin' Hall in Las Vegas, the planned construction of Horseshoe Baltimore as well as the development and construction of non-gaming venues such as Project Linq in Las Vegas and Caesars Palace Longmu Bay in China, are susceptible to various risks and uncertainties, such as: Moreover, our development and expansion projects are sometimes jointly pursued with third parties or by licensing our brands to third parties. These joint development, expansion projects or license agreements are subject to risks, in addition to those disclosed above, as they are dependent on our ability to reach and maintain agreements with third parties. For example, we made a bid with Rock Gaming LLC and other local investors for a video lottery terminal facility in Suffolk County Massachusetts and we can give no assurances that the bid will be awarded to us, that we will reach definitive agreements with the other parties that comprise the bid, or that the development project will be undertaken. Our failure to complete any new development or expansion project, or consummate any joint development, expansion projects or projects where we license our brands, as planned, on schedule, within budget or in a manner that generates anticipated profits, could have an adverse effect on our business, financial condition, results of operations and cash flow. We may sell or divest different properties or assets as a result of our evaluation of our portfolio of businesses. Such sales or divestitures would affect our costs, revenues, profitability and financial position. From time to time, we evaluate our properties and our portfolio of businesses and may, as a result, sell or attempt to sell, divest or spin-off different properties or assets. For example, in May 2012, we announced an agreement to sell our Harrah's St. Louis property and, in November 2012, we completed the sale. We plan to dispose of the subsidiaries that hold our land concession in Macau and in the fourth quarter 2012, began discussions with interested investors regarding sale of those entities. These sales or divestitures affect our costs, revenues, profitability and financial position. Divestitures have inherent risks, including possible delays in closing transactions (including potential difficulties in obtaining regulatory approvals), the risk of lower-than-expected sales proceeds for the divested businesses, and potential post-closing claims for indemnification. In addition, current economic conditions and relatively illiquid real estate markets may result in fewer potential bidders and unsuccessful sales efforts. Expected costs savings, which are offset by revenue losses from divested properties, may also be difficult to achieve or maximize due to our fixed cost structure. 18 • the existence of acceptable market conditions and demand for the completed project; • general construction risks, including cost overruns, change orders and plan or specification modification, shortages of equipment, materials or skilled labor, labor disputes, unforeseen environmental, engineering or geological problems, work stoppages, fire and other natural disasters, construction scheduling problems, and weather interferences; • changes and concessions required by governmental or regulatory authorities; • the ability to finance the projects, especially in light of our substantial indebtedness; • delays in obtaining, or inability to obtain, all licenses, permits and authorizations required to complete and/or operate the project; and • disruption of our existing operations and facilities. We may not realize all of the anticipated benefits of current or potential future acquisitions. Our ability to realize the anticipated benefits of acquisitions will depend, in part, on our ability to integrate the businesses of such acquired company with our businesses. The combination of two independent companies is a complex, costly and time consuming process. This process may disrupt the business of either or both of the companies, and may not result in the full benefits expected. The difficulties of combining the operations of the companies, including our recent acquisitions of Planet Hollywood in Las Vegas and Playtika Ltd., include, among others: We may be unable to realize in whole or in part the benefits anticipated for any current or future acquisitions. The risks associated with our international operations could reduce our profits. Some of our properties are located outside the United States, and our 2006 acquisition of London Clubs has increased the percentage of our revenue derived from operations outside the United States. International operations are subject to inherent risks including: For example, the political instability in Egypt due to the uprising in January 2011 has negatively affected our properties there. Any violation of the Foreign Corrupt Practices Act or other similar laws and regulations could have a negative impact on us. We are subject to risks associated with doing business outside of the United States, which exposes us to complex foreign and U.S. regulations inherent in doing business cross-border and in each of the countries in which it transacts business. We are subject to regulations imposed by the Foreign Corrupt Practices Act ("FCPA") and other anti-corruption laws that generally prohibit U.S. companies and their intermediaries from offering, promising, authorizing or making improper payments to foreign government officials for the purpose of obtaining or retaining business. Violations of the FCPA and other anti-corruption laws may result in severe criminal and civil sanctions as well as other penalties and the SEC and U.S. Department of Justice have increased their enforcement activities with respect to the FCPA. Internal control policies and procedures and employee training and compliance programs that we have implemented to deter prohibited practices may not be effective in prohibiting our employees, contractors or agents from violating or circumventing our policies and the law. If our employees or agents fail to comply with applicable laws or company policies governing our international operations, we may face investigations, prosecutions and other legal proceedings and actions which could result in civil penalties, administrative remedies and criminal sanctions. Any determination that we have violated the FCPA could have a material adverse effect on our financial condition. Compliance with international and U.S. laws and regulations that apply to our international operations increases our cost of doing business in foreign jurisdictions. We also deal with significant amounts of cash in our operations and are subject to various reporting and anti-money laundering regulations. Any violation of anti-money laundering laws or regulations by any of our resorts could have a negative effect on our results of operations. 19 • coordinating marketing functions; • undisclosed liabilities; unanticipated issues in integrating information, communications and other systems; • unanticipated incompatibility of purchasing, logistics, marketing and administration methods; • retaining key employees; • consolidating corporate and administrative infrastructures; • the diversion of management's attention from ongoing business concerns; and • coordinating geographically separate organizations. • political and economic instability; • variation in local economies; • currency fluctuation; • greater difficulty in accounts receivable collection; • trade barriers; and • burden of complying with a variety of international laws. The loss of the services of key personnel could have a material adverse effect on our business. The leadership of our chief executive officer, Mr. Loveman, and other executive officers has been a critical element of our success. The death or disability of Mr. Loveman or other extended or permanent loss of his services, or any negative market or industry perception with respect to him or arising from his loss, could have a material adverse effect on our business. Our other executive officers and other members of senior management have substantial experience and expertise in our business and have made significant contributions to our growth and success. The unexpected loss of services of one or more of these individuals could also adversely affect us. We are not protected by key man or similar life insurance covering members of our senior management. We have employment agreements with our executive officers, but these agreements do not guarantee that any given executive will remain with us. If we are unable to attract, retain and motivate employees, we may not be able to compete effectively and will not be able to expand our business. Our success and ability to grow are dependent, in part, on our ability to hire, retain and motivate sufficient numbers of talented people, with the increasingly diverse skills needed to serve clients and expand our business, in many locations around the world. Competition for highly qualified, specialized technical and managerial, and particularly consulting, personnel is intense. Recruiting, training, retention and benefit costs place significant demands on our resources. Additionally, our substantial indebtedness and the recent downturn in the gaming, travel and leisure sectors have made recruiting executives to our business more difficult. The inability to attract qualified employees in sufficient numbers to meet particular demands or the loss of a significant number of our employees could have an adverse effect on us. Work stoppages and other labor problems could negatively impact our future profits. Some of our employees are represented by labor unions. A lengthy strike or other work stoppage at one of our casino properties or construction projects could have an adverse effect on our business and results of operations. From time to time, we have also experienced attempts to unionize certain of our non-union employees. While these efforts have achieved only limited success to date, we cannot provide any assurance that we will not experience additional and more successful union activity in the future. There has been a trend towards unionization for employees in Atlantic City and Las Vegas. The impact of this union activity is undetermined and could negatively impact our profits. Acts of terrorism and war, natural disasters and severe weather may negatively impact our future profits. Terrorist attacks and other acts of war or hostility have created many economic and political uncertainties. For example, a substantial number of our customers for our properties in Las Vegas use air travel. On September 11, 2001, acts of terrorism occurred in New York City, Pennsylvania and Washington, D.C. As a result of these terrorist acts, domestic and international travel was severely disrupted, which resulted in a decrease in customer visits to our properties in Las Vegas. We cannot predict the extent to which disruptions in air or other forms of travel as a result of any further terrorist act, security alerts or war, uprisings, or hostilities in places such as Iraq and Afghanistan, other countries throughout the world will continue to directly or indirectly impact our business and operating results. For example, our operations in Cairo, Egypt were negatively affected from the uprising there in January 2011. As a consequence of the threat of terrorist attacks and other acts of war or hostility in the future, premiums for a variety of insurance products have increased, and some types of insurance are no longer available. Given current conditions in the global insurance markets, we are substantially underinsured for losses and interruptions caused by terrorist acts and acts of war. If any such event were to affect our properties, we would likely be adversely impacted. In addition, natural and man-made disasters such as major fires, floods, hurricanes, earthquakes and oil spills could also adversely impact our business and operating results. For example, four of our properties in Louisiana and Mississippi were closed for an extended period of time due to the damage sustained from Hurricanes Katrina and Rita in August and September 2005, respectively. Such events could lead to the loss of use of one or more of our properties for an extended period of time and disrupt our ability to attract customers to certain of our gaming facilities. If any such event were to affect our properties, we would likely be adversely impacted. Seven of our properties were closed during the first half of 2011 due to flooding and severe weather conditions. Additionally, in August 2011, our casinos in Atlantic City were closed during a busy summer weekend due to Hurricane Irene. 20 Our properties in Atlantic City were closed for five days and our property in Philadelphia was closed for two days in October and November 2012 due to Hurricane Sandy. Further, certain of these properties sustained minor damage from the storm, which totaled approximately $1 million . In addition, Hurricane Sandy significantly affected Atlantic City and surrounding areas in the northeast through flooding, wind and other water damage to properties and infrastructure, loss of power to residences and businesses and by creating a fuel shortage in New Jersey and surrounding areas. The regional storm damage in the northeast is likely to deter customers from visiting Atlantic City and our Atlantic City properties for some period of time. Our covered losses from property damage and business interruption did not exceed our deductible on this storm. Our results of operations in this region were significantly affected in the fourth quarter of 2012, with an estimated reduction in revenues of between $40 million and $45 million and a related reduction in operating income of between $35 million and $40 million . In most cases, we have insurance that covers portions of any losses from a natural disaster, but in many cases it is subject to deductibles and maximum payouts. Although we may be covered by insurance from a natural disaster, the timing of our receipt of insurance proceeds, if any, is out of our control. In some cases, however, we may receive no proceeds from insurance, such as our August 2011 and October and November 2012 closings in Atlantic City. Additionally, a natural disaster affecting one or more of our properties may affect the level and cost of insurance coverage we may be able to obtain in the future, which may adversely affect our financial position. As our operations depend in part on our customers’ ability to travel, severe or inclement weather can also have a negative impact on our results of operations. We are or may become involved in legal proceedings that, if adversely adjudicated or settled, could impact our financial condition. From time to time, we are defendants in various lawsuits or other legal proceedings relating to matters incidental to our business. The nature of our business subjects us to the risk of lawsuits filed by customers, past and present employees, competitors, business partners, Indian tribes and others in the ordinary course of business. As with all legal proceedings, no assurance can be provided as to the outcome of these matters and in general, legal proceedings can be expensive and time consuming. For example, we may have potential liability arising from a class action lawsuit against Hilton Hotels Corporation relating to employee benefit obligations. We may not be successful in the defense or prosecution of these lawsuits, which could result in settlements or damages that could significantly impact our business, financial condition and results of operations. We may incur impairments to goodwill, indefinite-lived intangible assets, or long-lived assets which could negatively affect our future profits. Each year, we perform a preliminary annual assessment of goodwill as of September 30, or more frequently if impairment indicators exist. For our preliminary assessment, we determine the estimated fair value of each reporting unit as a function, or multiple, of earnings before interest, taxes, depreciation and amortization ("EBITDA"), combined with estimated future cash flows discounted at rates commensurate with the capital structure and cost of capital of comparable market participants, giving appropriate consideration to the prevailing borrowing rates within the casino industry in general. We also evaluate the aggregate fair value of all of our reporting units and other non-operating assets in comparison to our aggregate debt and equity market capitalization at September 30. Both EBITDA multiples and discounted cash flows are common measures used to value and buy or sell businesses in our industry. In the fourth quarter, we finalize our assessment of goodwill once we complete our fair value analysis for reporting units where a step two impairment test is required. Each year, we perform an annual impairment assessment of other non-amortizing intangible assets as of September 30, or more frequently if impairment indicators exist. We determine the estimated fair value of our non-amortizing intangible assets by primarily using the Relief From Royalty Method and excess Earnings Method under the income approach. We review the carrying value of our long-lived assets whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. When performing this assessment, we consider current operating results, trends and prospects, as well as the effect of obsolescence, demand, competition, and other economic, legal, and regulatory factors. We are dependent upon our properties for future cash flows and our continued success depends on our ability to draw customers to our properties. Significant negative industry or economic trends, reduced estimates of future cash flows, disruptions to our business, slower growth rates or lack of growth in our business have resulted in impairment charges during the years ended December 31, 2012, 2011, and 2010, and, if one or more of such events occurs in the future, additional impairment charges may be required in future periods. If we are required to record additional impairment charges, this could have a material adverse impact on our consolidated financial statements. 21 We may be required to pay our future tax obligation on our deferred cancellation of debt income. Under the American Recovery and Reinvestment Act of 2009, or the ARRA, we received temporary federal tax relief under the Delayed Recognition of Cancellation of Debt Income, or CODI, rules. The ARRA contains a provision that allows for a deferral for tax purposes of CODI for debt reacquired in 2009 and 2010, followed by recognition of CODI ratably from 2014 through 2018. In connection with the debt that we reacquired in 2009 and 2010, we have deferred related CODI of $3.5 billion for tax purposes (net of Original Issue Discount ("OID") interest expense, some of which must also be deferred to 2014 through 2018 under the ARRA). We are required to include one-fifth of the deferred CODI, net of deferred and regularly scheduled OID, in taxable income each year from 2014 through 2018. Alternatively, the deferred CODI, net of deferred OID, could be accelerated into taxable income in a year an impairment transaction occurs. To the extent that our federal taxable income exceeds our available federal net operating loss carry forwards in those years, we will have a cash tax obligation. Our tax obligations related to CODI could be substantial and could materially and adversely affect our cash flows as a result of tax payments. For more information on the debt that we reacquired in 2009 and 2010, see "Management's Discussion and Analysis of Financial Condition and Results of Operation-Other Factors Affecting Net Income." Our business is particularly sensitive to energy prices and a rise in energy prices could harm our operating results. We are a large consumer of electricity and other energy and, therefore, higher energy prices may have an adverse effect on our results of operations. Accordingly, increases in energy costs may have a negative impact on our operating results. Additionally, higher electricity and gasoline prices which affect our customers may result in reduced visitation to our resorts and a reduction in our revenues. We may be indirectly impacted by regulatory requirements aimed at reducing the impacts of climate change directed at up-stream utility providers, as we could experience potentially higher utility, fuel, and transportation costs. Our insurance coverage may not be adequate to cover all possible losses that our properties could suffer. In addition, our insurance costs may increase and we may not be able to obtain the same insurance coverage in the future. We have comprehensive property and liability insurance policies for our properties in operation as well as those in the course of construction with coverage features and insured limits that we believe are customary in their breadth and scope. Market forces beyond our control may nonetheless limit the scope of the insurance coverage we can obtain or our ability to obtain coverage at reasonable rates. Certain types of losses, generally of a catastrophic nature, such as earthquakes, hurricanes and floods, or terrorist acts, or certain liabilities may be uninsurable or too expensive to justify obtaining insurance. As a result, we may not be successful in obtaining insurance without increases in cost or decreases in coverage levels. In addition, in the event of a substantial loss, the insurance coverage we carry may not be sufficient to pay the full market value or replacement cost of our lost investment or in some cases could result in certain losses being totally uninsured. As a result, we could lose some or all of the capital we have invested in a property, as well as the anticipated future revenue from the property, and we could remain obligated for debt or other financial obligations related to the property. Compromises of our information systems or unauthorized access to confidential information or our customers' personal information could materially harm our reputation and business. We collect and store confidential, personal information relating to our customers for various business purposes, including marketing and financial purposes, and credit card information for processing payments. For example, we handle, collect and store personal information in connection with our customers staying at our hotels and enrolling in our Total Rewards program. We may share this personal and confidential information with vendors or other third parties in connection with processing of transactions, operating certain aspects of our business or for marketing purposes. Our collection and use of personal data are governed by state and federal privacy laws and regulations as well as the applicable laws and regulations in other countries in which we operate. Privacy law is an area that changes often and varies significantly by jurisdiction. We may incur significant costs in order to ensure compliance with the various applicable privacy requirements. In addition, privacy laws and regulations may limit our ability to market to our customers. 22 We assess and monitor the security of collection, storage and transmission of customer information on an ongoing basis. We utilize commercially available software and technologies to monitor, assess and secure our network. Further, the systems currently used for transmission and approval of payment card transactions, and the technology utilized in payment cards themselves, all of which can put payment card data at risk, are determined and controlled by the payment card industry, not us. Although we have taken steps designed to safeguard our customers' confidential personal information, our network and other systems and those of third parties, such as service providers, could be compromised by a third party breach of our system security or that of a third party provider or as a result by purposeful or accidental actions of third parties, our employees or those employees of a third party. Advances in computer and software capabilities and encryption technology, new tools and other developments may increase the risk of such a breach. As a result of any security breach, customer information or other proprietary data may be accessed or transmitted by or to a third party. Despite these measures, there can be no assurance that we are adequately protecting our information. Any loss, disclosure or misappropriation of, or access to, customers' or other proprietary information or other breach of our information security could result in legal claims or legal proceedings, including regulatory investigations and actions, or liability for failure to comply with privacy and information security laws, including for failure to protect personal information or for misusing personal information, which could disrupt our operations, damage our reputation and expose us to claims from customers, financial institutions, regulators, payment card associations, employees and other persons, any of which could have an adverse effect on our financial condition, results of operations and cash flow. Our obligation to fund multi-employer pension plans to which we contribute may have an adverse impact on us. We contribute to and participate in various multi-employer pension plans for employees represented by certain unions. We are required to make contributions to these plans in amounts established under collective bargaining agreements. We do not administer these plans and, generally, are not represented on the boards of trustees of these plans. The Pension Protection Act enacted in 2006, or the PPA, requires under-funded pension plans to improve their funding ratios. Based on the information available to us, some of the multi-employer plans to which we contribute are either "critical" or "endangered" as those terms are defined in the PPA. We cannot determine at this time the amount of additional funding, if any, we may be required to make to these plans. However, plan assessments could have an adverse impact on our results of operations or cash flows for a given period. Furthermore, under current law, upon the termination of a multi-employer pension plan, or in the event of a withdrawal by us, which we consider from time to time, or a mass withdrawal or insolvency of contributing employers, we would be required to make payments to the plan for our proportionate share of the plan's unfunded vested liabilities. Any termination of a multi-employer plan, or mass withdrawal or insolvency of contributing employers, could require us to contribute an amount under a plan of rehabilitation or surcharge assessment that would have a material adverse impact on our consolidated financial condition, results of operations and cash flows. An active trading market for our common stock may not develop. Prior to our listing in February 2012, there was no public market for our common stock. We cannot predict the extent to which investor interest in us will lead to the development of an active trading market or how liquid that market might become. Our shares may be less liquid than the shares of other newly public companies and there may be imbalances between supply and demand for our shares. As a result, our share price may experience significant volatility and may not necessarily reflect the value of our expected performance. If an active trading market does not develop, owners of our common stock may have difficulty selling any of our common stock. Future sales or the possibility of future sales of a substantial amount of our common stock may depress the price of shares of our common stock. Future sales or the availability for sale of substantial amounts of our common stock in the public market could adversely affect the prevailing market price of our common stock and could impair our ability to raise capital through future sales of equity securities. As of March 1, 2013 , there were 125,362,197 shares outstanding, all of which are the same class of voting common stock. All of the outstanding shares of our common stock will be eligible for resale under Rule 144 or Rule 701 of the Securities Act of 1933, as amended ("Securities Act"), subject to volume limitations, applicable holding period requirements or other contractual restrictions. The Sponsors have the ability to cause us to register the resale of its shares, and our management members who hold shares will have the ability to include their shares in such registration. 23 In connection with the Co-Investors Transaction, we filed a shelf prospectus to register 22,339,143 shares of our common stock for resale on a continuous basis by the Participating Co-Investors, subject to the lockup agreements described herein. We may issue shares of common stock or other securities from time to time as consideration for future acquisitions and investments or for any other reason that our board of directors deems advisable. If any such acquisition or investment is significant, the number of shares of our common stock, or the number or aggregate principal amount, as the case may be, of other securities that we may issue may in turn be substantial. We may also grant registration rights covering those shares of common stock or other securities in connection with any such acquisitions and investments. We cannot predict the size of future issuances of our common stock or other securities or the effect, if any, that future issuances and sales of our common stock or other securities, including future sales by the Sponsors, will have on the market price of our common stock. Sales of substantial amounts of common stock (including shares of common stock issued in connection with an acquisition), or the perception that such sales could occur, may adversely affect prevailing market prices for our common stock. The price and trading volume of our common stock may fluctuate significantly. The market price of our common stock may be highly volatile and could be subject to wide fluctuations. In addition, the trading volume of our common stock may fluctuate and cause significant price variations to occur. Volatility in the market price of our common stock may prevent a holder of our common stock from being able to sell their shares. The market price for our common stock could fluctuate significantly for various reasons, including: In addition, in recent years, the stock market has experienced significant price and volume fluctuations. This volatility has had a significant impact on the market price of securities issued by many companies, including companies in the gaming, lodging, hospitality and entertainment industries. The changes frequently appear to occur without regard to the operating performance of the affected companies. Hence, the price of our common stock could fluctuate based upon factors that have little or nothing to do with us, and these fluctuations could materially reduce our share price. Because we have not paid dividends since the Acquisition and do not anticipate paying dividends on our common stock in the foreseeable future, holders of our common stock should not expect to receive dividends on shares of our common stock. We have no present plans to pay cash dividends to our stockholders and, for the foreseeable future, intend to retain all of our earnings for use in our business. The declaration of any future dividends by us is within the discretion of our Board and will be dependent on our earnings, financial condition and capital requirements, as well as any other factors deemed relevant by our Board. 24 • our operating and financial performance and prospects; • our quarterly or annual earnings or those of other companies in our industry; • conditions that impact demand for our products and services; • the public's reaction to our press releases, other public announcements and filings with the SEC; • changes in earnings estimates or recommendations by securities analysts who track our common stock; • market and industry perception of our success, or lack thereof, in pursuing our growth strategy; • strategic actions by us or our competitors, such as acquisitions or restructurings; • changes in government and environmental regulation, including gaming taxes; • changes in accounting standards, policies, guidance, interpretations or principles; • arrival and departure of key personnel; • changes in our capital structure; • sales of common stock by us or members of our management team; • the expiration of contractual lockup agreements; and • changes in general market, economic and political conditions in the United States and global economies or financial markets, including those resulting from natural disasters, terrorist attacks, acts of war and responses to such events. We are a “controlled company” within the meaning of the NASDAQ rules and, as a result, will qualify for, and intend to rely on, exemptions from certain corporate governance requirements. Hamlet Holdings controls a majority of our voting common stock. As a result, we are a “controlled company” within the meaning of NASDAQ corporate governance standards. Under the NASDAQ rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and we have elected not to comply with certain NASDAQ corporate governance requirements, including: As a result of these exemptions, we do not have a majority of independent directors nor do our nominating/corporate governance and compensation committees consist entirely of independent directors and we are not required to have an annual performance evaluation of the nominating/corporate governance and compensation committees. Accordingly, a holder of our common stock will not have the same protections afforded to stockholders of companies that are subject to all of the NASDAQ corporate governance requirements. Our bylaws and certificate of incorporation contain provisions that could discourage another company from acquiring us and may prevent attempts by our stockholders to replace or remove our current management. Provisions of our bylaws and our certificate of incorporation may delay or prevent a merger or acquisition that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares. In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace or remove our directors. These provisions include: 25 • the requirement that a majority of the Board consists of independent directors; • the requirement that we have a nominating/corporate governance committee that is composed entirely of independent directors; • the requirement that we have a compensation committee that is composed entirely of independent directors; and • the requirement for an annual performance evaluation of the nominating/corporate governance and compensation committees. • establishing a classified board of directors; • establishing limitations on the removal of directors; • permitting only an affirmative vote of at least two-thirds of the Board to fix the number of directors; • prohibiting cumulative voting in the election of directors; • empowering only the Board to fill any vacancy on the Board, whether such vacancy occurs as a result of an increase in the number of directors or otherwise; • authorizing the issuance of “blank check” preferred stock without any need for action by stockholders; • eliminating the ability of stockholders to call special meetings of stockholders; • prohibiting stockholders from acting by written consent if less than 50.1% of our outstanding common stock is controlled by the Sponsors; • prohibiting amendments to the bylaws without the affirmative vote of at least two-thirds of the Board or the affirmative vote of at least two-thirds of the total voting power of the outstanding shares entitled to vote; • prohibiting amendments to the certificate of incorporation relating to stockholder meetings, amendments to the bylaws or certificate of incorporation, or the election or classification of the Board without the affirmative vote of two-thirds of the shares entitled to vote on any matter; and • establishing advance notice requirements for nominations for election to the Board or for proposing matters that can be acted on by stockholders at stockholder meetings. Our issuance of shares of preferred stock could delay or prevent a change of control of us. Our Board has the authority to cause us to issue, without any further vote or action by the stockholders, shares of preferred stock, par value $0.01 per share, in one or more series, to designate the number of shares constituting any series, and to fix the rights, preferences, privileges and restrictions thereof, including dividend rights, voting rights, rights and terms of redemption, redemption price or prices and liquidation preferences of such series. The issuance of shares of preferred stock may have the effect of delaying, deferring or preventing a change in control of our company without further action by the stockholders, even where stockholders are offered a premium for their shares. Together, these charter and statutory provisions could make the removal of management more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our common stock. Furthermore, the existence of the foregoing provisions, as well as the significant common stock controlled by Hamlet Holdings, could limit the price that investors might be willing to pay in the future for shares of our common stock. They could also deter potential acquirers of our company, thereby reducing the likelihood that you could receive a premium for your common stock in an acquisition. PRIVATE SECURITIES LITIGATION REFORM ACT This Form 10-K contains or may contain “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts. We have based these forward-looking statements on our current expectations about future events. Further, statements that include words such as “may,” “will,” “project,” “might,” “expect,” “believe,” “anticipate,” “intend,” “could,” “would,” “estimate,” “continue” or “pursue,” or the negative of these words or other words or expressions of similar meaning may identify forward-looking statements. These forward-looking statements are found at various places throughout the report. These forward-looking statements, including, without limitation, those relating to future actions, new projects, strategies, future performance, the outcome of contingencies such as legal proceedings, and future financial results, wherever they occur in this report, are necessarily estimates reflecting the best judgment of our management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. These forward-looking statements should, therefore, be considered in light of various important factors set forth above and from time to time in our filings with the Securities and Exchange Commission. In addition to the risk factors set forth above, important factors that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include without limitation: 26 • the impact of our substantial indebtedness; • the effects of local and national economic, credit and capital market conditions on the economy in general, and on the gaming industry in particular; • the ability to realize the expense reductions from our cost savings programs; • access to available and reasonable financing on a timely basis; • the ability of our customer-tracking, customer loyalty and yield-management programs to continue to increase customer loyalty and same-store or hotel sales; • changes in laws, including increased tax rates, smoking bans, regulations or accounting standards, third-party relations and approvals, and decisions, disciplines and fines of courts, regulators and governmental bodies; • our ability to recoup costs of capital investments through higher revenues; • abnormal gaming holds (“gaming hold” is the amount of money that is retained by the casino from wagers by customers); • the effects of competition, including locations of competitors, competition for new licenses and operating and market competition; • the ability to timely and cost-effectively integrate companies that we acquire into our operations; • the potential difficulties in employee retention and recruitment as a result of our substantial indebtedness, the ongoing downturn in the gaming industry, or any other factor; You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Annual Report on Form 10-K. We undertake no obligation to publicly update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this Form 10-K or to reflect the occurrence of unanticipated events, except as required by law. ITEM 1B. Unresolved Staff Comments None. 27 • construction factors, including delays, increased costs of labor and materials, availability of labor and materials, zoning issues, environmental restrictions, soil and water conditions, weather and other hazards, site access matters and building permit issues; • litigation outcomes and judicial and governmental body actions, including gaming legislative action, referenda, regulatory disciplinary actions and fines and taxation; • acts of war or terrorist incidents, severe weather conditions, uprisings or natural disasters, including losses therefrom, including losses in revenues and damage to property, and the impact of severe weather conditions on our ability to attract customers to certain of our facilities, such as the amount of losses and disruption to our company as a result of Hurricane Sandy in late October 2012; • the effects of environmental and structural building conditions relating to our properties; • access to insurance on reasonable terms for our assets; • the impact, if any, of unfunded pension benefits under multi-employer pension plans; and • the other factors set forth under “Risk Factors” above. ITEM 2. Properties The following table sets forth information about our casino entertainment facilities as of December 31, 2012 : Summary of Property Information Property Type of Casino Casino Space– Sq. Ft. (a) Slot Machines (a) Table Games (a) Hotel Rooms & Suites (a) Atlantic City, New Jersey Harrah’s Atlantic City Land-based 158,500 2,630 180 2,590 Showboat Atlantic City Land-based 108,900 2,290 110 1,330 Bally’s Atlantic City Land-based 104,100 2,320 140 1,750 Caesars Atlantic City Land-based 111,800 2,190 180 1,140 Las Vegas, Nevada Harrah’s Las Vegas Land-based 90,600 1,300 100 2,530 Rio Land-based 117,300 1,080 90 2,520 Caesars Palace Land-based 139,200 1,370 180 4,270 Paris Las Vegas Land-based 95,300 1,030 90 2,920 Bally’s Las Vegas Land-based 66,200 910 70 2,810 Flamingo Las Vegas (b) Land-based 72,300 1,220 120 3,460 The Quad Resort & Casino (l) Land-based 32,800 700 50 2,540 Bill’s Gamblin’ Hall & Saloon Land-based 19,800 350 50 200 Hot Spot Oasis Land-based 1,000 20 — — Planet Hollywood Resort and Casino Land-based 64,500 1,100 90 2,500 Laughlin, Nevada Harrah’s Laughlin Land-based 56,000 930 40 1,510 Reno, Nevada Harrah’s Reno Land-based 41,600 790 40 930 Lake Tahoe, Nevada Harrah’s Lake Tahoe Land-based 57,500 820 70 510 Harveys Lake Tahoe Land-based 71,500 760 70 740 Cleveland, Ohio Horseshoe Cleveland (k) Land-based 96,000 1,850 120 — Chicago, Illinois area Harrah’s Joliet (Illinois) (c) Dockside 38,900 1,140 30 200 Horseshoe Hammond (Indiana) Dockside 108,200 3,000 155 — Metropolis, Illinois Harrah’s Metropolis Dockside 31,000 1,150 30 260 Southern Indiana Horseshoe Southern Indiana Dockside 86,600 1,750 110 500 Council Bluffs, Iowa Harrah’s Council Bluffs Dockside 28,000 830 20 250 Horseshoe Council Bluffs (d) Greyhound racing facility and land- based casino 78,800 1,670 70 — Tunica, Mississippi Horseshoe Tunica Dockside 63,000 1,460 90 510 Harrah’s Tunica Dockside 136,000 1,340 70 1,360 Tunica Roadhouse Hotel & Casino Dockside 31,000 730 30 130 Mississippi Gulf Coast Grand Casino Biloxi Dockside 31,300 750 30 490 North Kansas City, Missouri Harrah’s North Kansas City Dockside 60,100 1,520 60 390 28 ____________________ Property Type of Casino Casino Space– Sq. Ft. (a) Slot Machines (a) Table Games (a) Hotel Rooms & Suites (a) New Orleans, Louisiana Harrah’s New Orleans Land-based 125,100 1,830 150 450 Bossier City, Louisiana Louisiana Downs (e) Thoroughbred racing facility and land-based casino 12,000 1,070 — — Horseshoe Bossier City Dockside 29,800 1,360 80 610 Chester, Pennsylvania Harrah’s Philadelphia (f) Harness racing facility and land- based casino 112,600 2,800 120 — Phoenix, Arizona Harrah’s Ak-Chin (g) Indian Reservation 48,800 1,110 30 300 Cherokee, North Carolina Harrah’s Cherokee (g) Indian Reservation 176,800 3,870 140 1,110 San Diego, California Harrah’s Rincon (g) Indian Reservation 72,900 1,860 70 660 Punta del Este, Uruguay Conrad Punta del Este Resort and Casino (h) Land-based 44,500 550 70 290 Ontario, Canada Caesars Windsor (i) Land-based 100,000 2,300 80 760 United Kingdom Golden Nugget Land-based 5,100 50 20 — Playboy Club London Land-based 6,200 20 20 — The Sportsman Land-based 5,200 50 20 — Rendezvous Brighton Land-based 7,800 80 30 — Rendezvous Southend-on-Sea Land-based 8,700 50 30 — Manchester235 Land-based 11,500 40 40 — The Casino at the Empire Land-based 20,900 130 50 — Alea Nottingham Land-based 10,000 50 20 — Alea Glasgow Land-based 15,000 50 30 — Alea Leeds (m) Land-based 10,300 50 30 — Egypt The London Clubs Cairo-Ramses (g) Land-based 2,700 40 20 — Caesars Cairo (g) Land-based 5,500 30 20 — South Africa Emerald Safari (j) Land-based 37,700 560 40 190 (a) Approximate. (b) Includes O'Shea's Casino, which is adjacent to this property. O'Shea's Casino temporarily ceased operations on April 30, 2012 and is expected to reopen in 2013 as part of The Quad Resort & Casino. (c) We have an 80% ownership interest in and manage this property. (d) The property is owned by the Company, leased to the operator, and managed by the Company for the operator for a fee pursuant to an agreement that expires in October 2024. This information includes the Bluffs Run greyhound racetrack that operates at the property. (e) We own a 49% share of a venture that owns a 150-room hotel located near the property. (f) Prior to May 2012, this property operated under the Harrah's Chester name. We have a 99.5% ownership interest in and manage this property. (g) Managed. (h) We have an approximate 95% ownership interest and manage this property. In November 2012, we entered into a definitive agreement with Enjoy to sell 45% of Baluma S.A., our subsidiary that owns and operates Conrad. Under the terms of the agreement, we will have an approximate 52% ownership in this property. Please refer to Note 3 , “ Acquisitions, Investments, Dispositions and Divestitures ," to our consolidated financial statements appearing in Item 8 of this report for more details on this agreement. 29 ITEM 3. Legal Proceedings Litigation The Supreme Court of Nevada decided in early 2008 that food purchased for subsequent use in the provision of complimentary and/or employee meals is exempt from use tax. Previously, such purchases were subject to use tax and the Company has claimed, but not recognized into earnings, a use tax refund totaling $32.2 million , plus interest, as a result of the 2008 decision. In early 2009 , the Nevada Department of Taxation ("Department”) audited our refund claim, but has taken the position that those same purchases are now subject to sales tax; therefore, they subsequently issued a sales tax assessment totaling $27.4 million plus interest after application of our refund on use tax. On October 21, 2010 , the administrative law judge (“ALJ”) issued a decision and ruled in our favor on a number of key issues, including that complimentary employee meals are not subject to sales tax. Although both the Company and the Nevada Department of Taxation filed an appeal of the decision with the Nevada Tax Commission (“Commission”), the case was returned to the ALJ for further factual development. The ALJ issued a second decision on March 8, 2012 , reversing her previous, partially favorable ruling relating to the taxability of complimentary employee meals and affirmed the taxability of complimentary meals but limited the entire sales tax assessment to the amount of the Company's use tax refund claims resulting in no use tax refund awarded but no sales tax amounts due. The ALJ decision was affirmed in the Commission hearing on June 25, 2012 and the Commission's final decision was issued on July 31, 2012 . We filed a petition for judicial review with the District Court on August 7, 2012 . On March 1, 2013, the District Court judge ruled that employee meals are not subject to sales tax but affirmed the application of sales tax to complimentary patron meals. Additionally, the judge ordered a refund of the portion of our use tax refund claims filed prior to October 1, 2005 without any offsetting sales tax assessments relating to complimentary patron meals for those periods. We expect that the District Court decision will be appealed to the Nevada Supreme Court. Subsequent to a written Commission decision issued in February 2012 for another gaming company, the Department has issued draft regulations requiring the collection of sales tax on the retail value of complimentary meals and the cost of employee meals. Although the Commission approved the regulation on June 25, 2012 , there are several additional approvals required, including by the Legislative Commission, before the regulation is finalized. On June 6, 2012 , the Department issued additional guidance regarding the payment of sales tax on complimentary and employee meals, maintaining that meals are taxable as of February 15, 2012 but that the payment of the tax is due, without penalty or interest, at the earlier of (a) one month after approval of the regulation by the Legislative Commission, (b) one month after a Nevada Supreme Court decision, (c) the effective date of any legislation or (d) June 30, 2013 . The Department stated that it provided this additional guidance regarding the deferral of payment requirements because the Legislative Commission has not had the opportunity to approve the regulation and because there are several ongoing appeals that have not been heard by the Tax Commission and the Nevada Supreme Court. As of December 31, 2012 we had accrued $16.4 million in sales tax accruals on complementary meals. Due to uncertainty regarding the ultimate outcome of our pending litigation and/or the final approval and form of the pending regulation, we continue to record sales tax reserves against loss on this matter. The Company is party to ordinary and routine litigation incidental to our business. We do not expect the outcome of any pending litigation to have a material effect on our consolidated financial position, results of operations, or cash flows. ITEM 4. Mine Safety Disclosures Not applicable. 30 (i) We operate this property and the province of Ontario owns the complex through the Ontario Lottery and Gaming Corporation. (j) We have a 70% ownership interest in and manage this property. (k) We manage this property and have a 20% interest in ROC which owns this property. (l) Prior to December 2012, this property operated under the name Imperial Palace Hotel and Casino. (m) We closed this casino on March 4, 2013. Disclosure pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act On February 12, 2013, certain investment funds affiliated with Apollo Global Management, LLC, one of our Sponsors, beneficially owned approximately 19.6% of the ordinary shares of LyondellBasell Industries N.V. (“LyondellBasell”) and have certain director nomination rights. LyondellBasell may be deemed to be under common control with Caesars, but this statement is not meant to be an admission that common control exists. As a result, it appears that we are required to provide disclosures as set forth herein pursuant to Section 219 of the new Iran Threat Reduction and Syria Human Rights Act of 2012 and Section 13(r) of the Exchange Act. The Annual Report on Form 10-K for the year ended December 31, 2012 filed by LyondellBasell with the SEC on February 12, 2013 contained the disclosure set forth below (with all references contained therein to “the Company” being references to LyondellBasell and its consolidated subsidiaries). The disclosure below does not relate to any activities conducted by Caesars and does not involve Caesars or Caesars management. The disclosure relates solely to activities conducted by LyondellBasell and its consolidated subsidiaries. “ Disclosure pursuant to Section 219 of the Iran Threat Reduction & Syria Human Rights Act Certain non-U.S. subsidiaries of our predecessor, LyondellBasell AF, licensed processes to construct and operate manufacturing plants in Iran that produce polyolefin plastic material, which is used in the packaging of household and consumer goods. The subsidiaries also provided engineering support and supplied catalyst products to be used in these manufacturing operations. In 2009, the Company made the decision to suspend the pursuit of any new business dealings in Iran. As previously disclosed by the Company, in 2010, our management made the further decision to terminate all business by the Company and its direct and indirect subsidiaries with the government, entities and individuals in Iran. The termination was made in accordance with all applicable laws and with the knowledge of U.S. Government authorities. As part of the termination, we entered into negotiations with Iranian counterparties in order to exit our contractual obligations. As described below, two transactions occurred under settlement agreements in early 2012, although the agreements to cease our activities with these counterparties were entered into in 2011. In January 2012, one of our non-U.S. subsidiaries received a final payment of approximately €3.5 million for a shipment of catalyst from an entity that is 50% owned by the National Petrochemical Company of Iran. Our shipment of the catalyst was in February 2012 as part of the agreement related to our termination and cessation of all business under agreements with the counterparty. In 2012, the gross revenue from this limited activity was approximately, €4.2 million and profit attributable to it was approximately, €2.4 million. In January and February of 2012, one of the Company's non-U.S. subsidiaries provided certain engineering documents relating to a polyolefin plastic process to a licensee comprising three Iranian companies, one of which is 20% owned by the National Oil Company of Iran. The provision of documents was the Company's final act with respect to the termination and cessation of all business under agreements with the counterparties. No gross revenue or profit was attributable to this activity in 2012. The transactions disclosed in this report do not constitute violations of applicable anti-money laundering laws or sanctions laws administered by the U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC), and are not the subject of any enforcement actions under the Iran sanction laws. We have not conducted, and do not intend to conduct, any further business activities in Iran or with Iranian counterparties.” 31 PART II Market Information Effective February 8, 2012 , our common stock trades on the NASDAQ under the symbol “ CZR .” The following table sets forth the high and low sales prices for the common stock on the NASDAQ for each fiscal quarter of 2012. Subsequent to the Acquisition in 2008 , and prior to the above date, our outstanding common stock was privately held, and there was no established public trading market for our common stock; therefore, there are no high and low sales prices for the common stock available for 2011 . As of March 1, 2013 , there were 125,362,197 shares of common stock issued and outstanding that were held by 171 stockholders of record. Dividends We did not pay any cash dividends in the years ended December 31, 2012 or 2011 . We currently do not anticipate paying cash dividends on our common stock in the foreseeable future. Any future determination to declare cash dividends will be made at the discretion of our board of directors, subject to applicable laws and will depend on our financial condition, results of operations, capital requirements, general business conditions and other factors that our board of directors may deem relevant. Recent Sales of Unregistered Securities There have not been any sales by the Company of equity securities in the fiscal years ended December 31, 2012 , 2011 , or 2010 that have not been registered under the Securities Act. Share Repurchases The Company did not repurchase shares of our common stock during the quarter ended December 31, 2012 . 32 ITEM 5. Market for the Company’s Common Stock, Related Stockholder Matters and Issuer Purchases of Equity Securities High Low 2012 First Quarter (from February 8, 2012) $ 17.90 $ 9.00 Second Quarter 15.74 11.03 Third Quarter 11.67 6.38 Fourth Quarter 8.25 4.52 Performance Graph The graph depicted below compares the cumulative total stockholder return on our common stock with the cumulative total return on the Standard & Poor's 500 Stock Index (“S&P 500”) and the Dow Jones U.S. Gambling Total Stock Market Index (“Dow Jones U.S. Gambling”) for the period beginning on February 8, 2012 (the date our common stock commenced trading on the NASDAQ Global Select Market) and ending on December 31, 2012 . NASDAQ OMX furnished the data. The performance graph assumes a $100 investment in our stock and each of the two indices, respectively, on February 8, 2012 , and that all dividends were reinvested. Stock price performance, presented for the period from February 8, 2012 to December 31, 2012 , is not necessarily indicative of future results. The performance graph should not be deemed filed or incorporated by reference into any other of our filings under the Securities Act or the Exchange Act, unless we specifically incorporate the performance graph by reference therein. Equity Compensation Plan Information In February 2008, our Board of Directors approved the Harrah's Entertainment, Inc. Management Equity Incentive Plan, as amended (the "2008 Incentive Plan") and granted options to purchase our common stock to certain of our officers and employees. In February 2012, our Board of Directors adopted the 2012 Performance Incentive Plan, as amended (the "2012 Incentive Plan"), which is more fully discussed in Item 8. Financial Statements and Supplementary Data, Note 18 , “ Employee Benefit Plans .” The table below sets forth information regarding our equity compensation plans as of December 31, 2012 : ____________________ 33 2/8/2012 12/31/2012 CZR $100.00 $44.96 S&P 500 Index 100.00 107.85 Dow Jones U.S. Gambling 100.00 98.69 Equity compensation plans not approved by security holders Number of securities to be issued upon exercise of outstanding options or vesting of restricted stock Weighted-average exercise price of outstanding options Number of securities remaining available for future issuance under equity compensation plans Stock Options (1) 8,478,148 $ 10.51 7,303,449 Restricted Stock (2) 50,000 — N/A (1) The weighted average remaining contract life for the options set forth in this column is 9.4 years. The number of securities to be issued upon exercise of outstanding options includes 231,918 shares related to a rollover option initially signed with an executive on January 27, 2008 that provided for the conversion of options to purchase shares of the Company prior to the Acquisition into options to purchase shares of the Company following the Acquisition (the "2008 Rollover Options"), which had an expiration date of June 17, 2012. On April 16, 2012, the Human Resources Committee of our Board of Directors approved an award to replace the 2008 Rollover Options with an option to purchase an equal amount of shares of our common stock pursuant to the 2012 Performance Incentive Plan (the "2012 Rollover Options"). The 2012 Rollover Options are fully vested, expire in April 2022 and were issued under the 2012 Incentive Plan. (2) The shares of restricted common stock are issued under the 2012 Incentive Plan. ITEM 6. Selected Financial Data The selected financial data set forth below for the periods indicated, should be read in conjunction with the consolidated financial statements and Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, included elsewhere in this Form 10-K. 34 Successor Predecessor (In millions, except per share data) 2012 2011 2010 2009 Jan. 28, 2008 through Dec. 31, 2008 Jan. 1, 2008 through Jan. 27, 2008 OPERATING DATA Net revenues $ 8,586.7 $ 8,573.3 $ 8,553.2 $ 8,622.4 $ 9,100.4 $ 739.2 Write-downs, reserves, and project opening costs, net of recoveries 106.2 73.8 149.7 111.4 45.1 5.4 Intangible and tangible asset impairment charges 1,067.7 32.8 184.0 1,638.0 5,462.6 — (Loss)/income from operations (313.4 ) 816.3 483.1 (674.7 ) (4,263.4 ) (38.5 ) Gains on early extinguishments of debt 136.0 47.9 115.6 4,965.5 742.1 — (Loss)/income from continuing operations, net of income taxes (1,382.7 ) (698.1 ) (849.4 ) 811.0 (5,185.8 ) (100.6 ) (Loss)/income from discontinued operations, net of income taxes (109.5 ) 31.4 26.1 35.4 101.5 1.3 Net (loss)/income (1,492.2 ) (666.7 ) (823.3 ) 846.4 (5,084.3 ) (99.3 ) Net (loss)/income attributable to Caesars (1,497.5 ) (687.6 ) (831.1 ) 827.6 (5,096.3 ) (100.9 ) COMMON STOCK DATA Diluted (loss)/earnings per share From continuing operations (11.08 ) (5.75 ) (8.63 ) 3.78 (77.42 ) (0.55 ) From discontinued operations (0.87 ) 0.25 0.26 0.17 1.43 0.01 Net (loss)/income (11.95 ) (5.50 ) (8.37 ) 3.95 (75.99 ) (0.54 ) FINANCIAL POSITION DATA Total assets $ 27,998.1 $ 28,515.6 $ 28,587.7 $ 28,979.2 $ 31,048.6 $ 23,371.3 Long-term debt 20,532.2 19,759.5 18,785.5 18,868.8 23,123.3 12,367.5 Stockholders’ (deficit)/equity (411.7 ) 1,006.7 1,672.6 (867.0 ) (1,360.8 ) 6,733.4 The following discussion should be read in conjunction with, and is qualified in its entirety by, the audited consolidated financial statements and the notes thereto and other financial information included elsewhere in this Form 10-K. Certain statements in this “Management's Discussion and Analysis of Financial Condition and Results of Operations” are forward-looking statements. See “Item 1A. Risk Factors— PRIVATE SECURITIES LITIGATION REFORM ACT” of this report. Overview We are the world’s most diversified casino-entertainment provider and the most geographically diverse U.S. casino-entertainment company. As of December 31, 2012 , we owned, operated, or managed, through various subsidiaries, 52 casinos in 13 U.S. states and seven countries. The majority of these casinos operate in the United States, primarily under the Caesars, Harrah’s, and Horseshoe brand names and in England. Our casino entertainment facilities include 33 land-based casinos, 11 riverboat or dockside casinos, three managed casinos on Indian lands in the United States, one managed casino in Cleveland, Ohio, one managed casino in Canada, one casino combined with a greyhound racetrack, one casino combined with a thoroughbred racetrack, and one casino combined with a harness racetrack. Our land-based casinos include nine in England, two in Egypt, one in Scotland, one in South Africa and one in Uruguay. As of December 31, 2012 , our facilities had an aggregate of approximately three million square feet of gaming space and approximately 43,000 hotel rooms. Our industry-leading customer loyalty program, Total Rewards, has over 45 million members. We use the Total Rewards system to market promotions and to generate customer play across our network of properties. In addition, we own an online gaming business, providing for real money casino, bingo, and poker games in the United Kingdom, alliances with online gaming providers in Italy and France, "play for fun" offerings in other jurisdictions, social games on Facebook and other social media websites, and mobile application platforms. We also own and manage the World Series of Poker tournament and brand. Regional Aggregation The executive officers of our company review operating results, assess performance, and make decisions related to the allocation of resources on a property-by-property basis. We believe, therefore, that each property is an operating segment and that it is appropriate to aggregate and present the operations of our company as one reportable segment. To provide more meaningful information than would be possible on a consolidated basis, our casino properties (as of December 31, 2012 , or otherwise noted below) have been grouped into seven regions as shown in the table below to facilitate discussion of our operating results: 35 ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Las Vegas Atlantic City Louisiana/Mississippi Iowa/Missouri Caesars Palace Harrah’s Atlantic City Harrah’s New Orleans Harrah’s North Kansas City Bally’s Las Vegas Showboat Atlantic City Harrah’s Louisiana Downs Harrah’s Council Bluffs Flamingo Las Vegas (a) Bally’s Atlantic City Horseshoe Bossier City Horseshoe Council Bluffs/ Harrah’s Las Vegas Caesars Atlantic City Grand Biloxi Bluffs Run Paris Las Vegas Harrah’s Philadelphia (c) Harrah’s Tunica Rio Horseshoe Tunica The Quad Resort & Casino (b) Tunica Roadhouse Hotel & Bill’s Gamblin’ Hall & Casino Saloon Planet Hollywood Resort & Casino Illinois/Indiana Other Nevada Managed and International Horseshoe Southern Indiana Harrah’s Reno Harrah’s Ak-Chin (e) Harrah’s Joliet (d) Harrah’s Lake Tahoe Harrah’s Cherokee (e) Harrah’s Metropolis Harveys Lake Tahoe Harrah’s Rincon (e) Horseshoe Hammond Harrah’s Laughlin Horseshoe Cleveland (f) Conrad Punta del Este (g) Caesars Windsor (h) London Clubs International (i) ____________________ Consolidated Operating Results Net revenues, (loss)/income from operations, and loss from continuing operations, net of income taxes for all periods presented in the table above exclude the results of the Harrah's St. Louis casino and the results of the subsidiaries that hold our land concession in Macau, both of which are presented as discontinued operations. ____________________ * Operating margin is calculated as (loss)/income from operations divided by net revenues. ** Not meaningful. Year ended December 31, 2012 compared to year ended December 31, 2011 Net revenues for 2012 increased $13.4 million or 0.2% from 2011 due mainly to higher revenues from our online businesses and from Caesars' management companies due in part to the opening of Horseshoe Cleveland in May 2012. These higher revenues were mostly offset by revenue declines in the Atlantic City Region resulting from hurricane-related property closures as well as continued competitive pressures in that region. All five properties in the Atlantic City Region had closures during the fourth quarter 2012 due to Hurricane Sandy, which made landfall on October 29, 2012. Harrah's Philadelphia reopened two days later and the Atlantic City properties reopened five days later. However, the region's economy has been slow to recover due to the devastation caused by the hurricane. We estimate that the negative impact of Hurricane Sandy on net revenues was approximately $40 million to $45 million . 36 (a) Includes O'Shea's Casino, which is adjacent to this property. O'Shea's Casino temporarily ceased operations on April 30, 2012 and is expected to reopen in 2013 as part of The Quad Resort & Casino. (b) Prior to December 2012, this property operated under the name Imperial Palace Hotel and Casino. (c) Prior to May 2012, this property operated under the Harrah's Chester name. We have a 99.5% ownership interest in and manage this property. (d) We have an 80% ownership interest in and manage this property. (e) Managed. (f) We manage this property and have a 20% interest in Rock Ohio Caesars, LLC, which owns this property. (g) We have an approximate 95% ownership interest in and manage this property. In November 2012, we entered into a definitive agreement with Enjoy to sell 45% of Baluma S.A., our subsidiary that owns and operates Conrad. Under the terms of the agreement, we will have an approximate 52% ownership in this property. Please refer to Note 3 , “ Acquisitions, Investments, Dispositions and Divestitures ," to our consolidated financial statements appearing in Item 8 of this report for more details on this agreement. (h) We operate this property and the province of Ontario owns the complex through the Ontario Lottery and Gaming Corporation. (i) As of December 31, 2012, w e owned, operated, or managed 10 casino clubs in the provinces of the United Kingdom and two in Egypt. On March 4, 2013, we closed one of the casino clubs in the United Kingdom. We also have a 70% ownership interest in and manage one casino in South Africa. Percent Favorable/(Unfavorable) (Dollars in millions) 2012 2011 2010 2012 vs 2011 2011 vs 2010 Casino revenues $ 6,246.9 $ 6,394.5 $ 6,671.8 (2.3 )% (4.2 )% Net revenues 8,586.7 8,573.3 8,553.2 0.2 % 0.2 % (Loss)/income from operations (313.4 ) 816.3 483.1 ** 69.0 % Loss from continuing operations, net of income taxes (1,382.7 ) (698.1 ) (849.4 ) (98.1 )% 17.8 % (Loss)/income from discontinued operations, net of income taxes (109.5 ) 31.4 26.1 ** 20.3 % Net loss attributable to Caesars (1,497.5 ) (687.6 ) (831.1 ) (117.8 )% 17.3 % Operating margin * (3.6 )% 9.5 % 5.6 % (13.1) pts 3.9 pts For 2012 , loss from operations was $313.4 million compared with income from operations of $816.3 million in 2011 . This change was due largely to non-cash impairment charges that totaled $1,067.7 million , comprised of intangible asset impairment charges of $195.2 million related to goodwill, $209.0 million related to trademarks and $33.0 million related to gaming rights, as well as tangible asset impairment charges of $450.0 million related to the tangible assets of one of the properties in the Atlantic City Region and $180.5 million related to a previously halted development project in Biloxi, Mississippi. By comparison, non-cash intangible and tangible asset impairment charges were $32.8 million in 2011. Also contributing to the loss from operations in 2012 was an increase in depreciation expense associated with the opening of the Octavius Tower at Caesars Palace Las Vegas in January 2012, and increased corporate expenses and write-downs, reserves, and project opening costs, net of recoveries. Net loss attributable to Caesars for 2012 increased $809.9 million or 117.8% from 2011 , due mainly to the increase in loss from operations and a net loss from our discontinued operations of $109.5 million, partially offset by increases in gains on early extinguishments of debt and the tax rate benefit as further described in "Other Factors Affecting Net Income" that follows herein. Year ended December 31, 2011 compared to year ended December 31, 2010 Despite a decline in casino revenues, net revenues for 2011 increase d $20.1 million , or 0.2% , from 2010 , as favorable results in Las Vegas and from our international and online businesses, including revenues related to Playtika, which we acquired during the year, were somewhat offset by revenue declines at properties in the Midwest and Atlantic City. For 2011 , income from operations increased $333.2 million , or 69.0% , from 2010 . This increase was due mainly to a $151.2 million decrease from 2010 of intangible and tangible non-cash impairment charges, the effects of cost-reduction efforts under cost savings programs, including Project Renewal, and a $75.9 million reduction in write-downs, reserves, recoveries, and project opening costs. Net loss attributable to Caesars for 2011 decreased $143.5 million or 17.3% , compared with 2010 , due primarily to higher income from operations and an increase in the benefit for income taxes, partially offset by higher interest expense in 2011 , due mainly to certain interest rate swaps no longer qualifying for hedge accounting. Performance Metrics We measure performance in part through the tracking of trips by rated customers, which means a customer whose gaming activity is tracked through the Total Rewards customer-loyalty system ("trips"), and by spend per rated customer trip ("spend per trip"). A trip is created by a Total Rewards card holder engaging in one or more of the following activities while at one of our properties: (1) hotel stay, (2) gaming activity, or (3) a comp redemption, which means the receipt of a complimentary item given out by our casinos. In markets where we have multiple properties, customers often engage in trip generating activities at more than one property in a day. In these instances, we consider the market as a whole and do not count multiple trips. Customer spend means the cumulative rated theoretical spend (which is the amount of money expected to be retained by the casino based upon the mathematics underlying the particular game as a fraction of the amount of money wagered by the customer) across all game types for a specific customer. For the Atlantic City region, we refer to customers that stay at a hotel in one of its properties as lodgers and customers that may play at a casino located in one of its properties but do not stay at a hotel at such property as non-lodgers. The following table reflects the percentage increase/(decrease) in trips and spend per trip for the U.S. regions for 2012 compared with 2011 : 37 Trips Spend per Trip Consolidated Caesars (4.1 )% 0.9 % Las Vegas region 1.0 % 3.2 % Atlantic City region: Lodgers (10.2 )% (0.8 )% Non-lodgers (8.3 )% (1.1 )% All other regions (2.5 )% (0.5 )% For 2012, trips decreased on a consolidated basis compared with 2011 , due mainly to hurricane-related property closures and competitive pressures in the Atlantic City Region, as well as modest declines in the rest of our domestic regions, except for Las Vegas where trips rose slightly. For 2012 , spend per trip increased from 2011 , due mainly to an increase in the Las Vegas region largely as a result of strength in the international high-end segment, which was partially offset by declines in Atlantic City and our other domestic regions. On a consolidated basis, cash average daily room rates for 2012 were relatively unchanged from 2011 as declines in the Atlantic City Region as a result of lost convention business in the fourth quarter 2012 due to the hurricane were offset by increases in our Iowa/Missouri and Louisiana/Mississippi regions. Total occupancy percentage decreased 0.6 percentage points in 2012 compared with 2011 due mainly to declines in the Atlantic City Region, partially offset by increases in several of our other domestic regions. The following table reflects the percentage increase/(decrease) in trips and spend per trip for our U.S. regions for 2011 compared with 2010 : For 2011 , trips on a consolidated basis declined from 2010 due to (i) new competition in the Atlantic City, Iowa/Missouri, and Illinois/Indiana regions, (ii) reduced access to one of our properties due to a bridge closure in the Illinois/Indiana region beginning in the first week of September 2011 that reopened in February 2012, (iii) temporary closures in the Atlantic City region during the third quarter of 2011 due to Hurricane Irene, (iv) temporary closures of seven properties in the Illinois/Indiana and Louisiana/Mississippi regions during the first half of 2011 due to flooding and severe weather conditions, and (v) the impact of marketing programs on trip frequency of certain customer segments in all U.S. regions. These decreases in trips were partially offset by an increase in trips for the Las Vegas region during 2011. On a consolidated basis, cash average daily room rates for 2011 increased to $91 from $86 , or 6.4% , when compared to 2010 largely driven by the Las Vegas region. Total occupancy percentages in 2011 increased 1.4 percentage points when compared to 2010 . Regional Operating Results Las Vegas Region ____________________ * Operating margin is calculated as income from operations divided by net revenues. 38 Trips Spend per Trip Consolidated Caesars (6.7 )% 3.4 % Las Vegas region 2.5 % 2.7 % Atlantic City region: Lodgers (0.2 )% (2.2 )% Non-lodgers (5.6 )% (0.7 )% All other regions (9.8 )% 2.7 % Percent Favorable/(Unfavorable) (Dollars in millions) 2012 2011 2010 2012 vs 2011 2011 vs 2010 Casino revenues $ 1,641.5 $ 1,582.5 $ 1,544.4 3.7 % 2.5 % Net revenues 3,029.9 3,013.1 2,834.8 0.6 % 6.3 % Income from operations 428.7 495.5 349.9 (13.5 )% 41.6 % Operating margin* 14.1 % 16.4 % 12.3 % (2.3) pts 4.1 pts Net revenues for 2012 increased $16.8 million or 0.6% from 2011 due primarily to strength in the international, high-end gaming segment contributing to higher casino revenues and the January 2012 opening of 662 additional rooms in the Octavius Tower at Caesars Palace Las Vegas contributing to higher rooms revenue. Trips increased 1.0% in 2012 from 2011 and spend per trip increased 3.2% . In 2012 , hotel revenues increased 1.9%, cash average daily room rates were relatively unchanged and occupancy rates decreased 1.5 percentage points from 2011 . Revenues were negatively impacted by Project Linq construction activities in 2012, which included the closure of O’Shea’s casino and several retail outlets at Harrah’s Las Vegas earlier in 2012, and the ongoing renovation of The Quad Resort & Casino (formerly, the Imperial Palace Hotel and Casino). We estimate that Project Linq construction activities reduced 2012 net revenues by approximately $30 million to $40 million . Income from operations decreased $66.8 million , or 13.5% , from 2011, due primarily to an increase in property operating expenses and depreciation expense associated with the Octavius Tower at Caesars Palace Las Vegas, in addition to an increase of $19.7 million in write-downs, reserves, and project opening costs, net of recoveries related primarily to increased remediation costs in the region. We estimate that Project Linq construction activities reduced 2012 income from operations by approximately $15 million to $25 million . Strengthening fundamentals in the overall Las Vegas market and the international, high-end gaming segment positively impacted our 2011 results in the region compared with 2010. Increases in trips, spend per trip, cash average daily room rates, and total occupancy contributed to a $178.3 million , or 6.3% increase in our Las Vegas region net revenues for 2011 from 2010 . Hotel revenues in the region increased 11.4% , cash average daily room rates increased 8.0% to $92 from $85 and total occupancy percentages rose 3.2 percentage points for 2011 , marking our highest occupancy percentage in the Las Vegas region in six years. For 2011 , income from operations increased $145.6 million , or 41.6% , from 2010 due to the impact of increased revenues and a decrease in remediation costs related to the properties in the region. During 2012, we secured $185.0 million in financing to fund the complete renovation of Bill’s Gamblin’ Hall & Saloon into a boutique lifestyle hotel that includes a dayclub/nightclub. The renovation will include a complete remodeling of the guest rooms, casino floor, and common areas, the addition of a second floor restaurant, and the construction of an approximately 65,000 square foot rooftop pool and dayclub/nightclub. We will own the property and manage the casino, hotel, and food and beverage operations, and the dayclub/nightclub will be leased to a third party. Bill's Gamblin' Hall & Saloon temporarily closed in early February 2013 to accommodate these renovations. The renovated hotel, casino, and restaurant are expected to open in December 2013 and the dayclub/nightclub is expected to open in April 2014. Through December 31, 2012, $3.0 million had been spent on this project. See Note 8 , “ Debt —Bill's Credit Facility,” to the consolidated financial statements included in Item 8 of this report, for discussion of the financing related to this project. During 2011, we commenced construction on Project Linq, a dining, entertainment, and retail development between the Flamingo casino and The Quad Resort & Casino, on the east side of the Las Vegas Strip, which is scheduled to open in phases beginning in late 2013. Project Linq also includes the construction of a 550-foot observation wheel, the High Roller, which is expected to open in early 2014. Through December 31, 2012, $240.6 million had been spent on this project, of which $187.9 million was spent in 2012. See Note 8 , “ Debt — Octavius and Linq Projects ,” to the consolidated financial statements included in Item 8 of this report, for discussion of the financing related to Project Linq. Atlantic City Region ____________________ * Operating margin is calculated as (loss)/income from operations divided by net revenues. ** Not meaningful. 39 Percent Favorable/(Unfavorable) (Dollars in millions) 2012 2011 2010 2012 vs 2011 2011 vs 2010 Casino revenues $ 1,429.6 $ 1,584.9 $ 1,696.8 (9.8 )% (6.6 )% Net revenues 1,681.3 1,839.1 1,899.9 (8.6 )% (3.2 )% (Loss)/income from operations (394.6 ) 79.6 83.7 ** (4.9 )% Operating margin* (23.5 )% 4.3 % 4.4 % (27.8) pts (0.1) pts For 2012 , net revenues decreased by $157.8 million , or 8.6% from 2011 , due mainly to continued competitive pressures and the negative impact of Hurricane Sandy which forced the closure of our properties in Atlantic City for five days and our property in Philadelphia for two days in the fourth quarter 2012. The hurricane related property closures contributed to a decline in trips during 2012 compared with 2011, and spend per trip declined slightly. We estimate that the negative impact of Hurricane Sandy on net revenues was approximately $40 million to $45 million . Loss from operations was $394.6 million for 2012 compared with income from operations of $79.6 million in 2011 . This change was due largely to a non-cash impairment charge of $450.0 million recorded in the fourth quarter 2012 related to tangible assets of one of the properties in the region, with no comparable charge in 2011, as well as the earnings impact of lower revenues. See Note 5, "Property and Equipment, net" to the consolidated financial statements included in Item 8 of this report, for discussion of the tangible asset impairments. We estimate that the negative impact of Hurricane Sandy on loss from operations was approximately $35 million to $40 million . We expect that the region will continue to be challenged as a result of the slow recovery from the hurricane and competitive pressures. Atlantic City region net revenues declined $60.8 million , or 3.2% , for 2011 from 2010 due to declines in trips and spend per trip in both lodger and non-lodger segments. Trip declines resulted from temporary closures of the properties in the region during the third quarter of 2011 due to Hurricane Irene, the continued effect of competition from new casinos and the mid-2010 introduction of table games in the Pennsylvania market. Income from operations declined $4.1 million , or 4.9% , for 2011 from 2010 due to lower revenues, which was mostly offset by reduced property operating expenses as a result of our cost reduction activities. Louisiana/Mississippi Region ____________________ * Operating margin is calculated as (loss)/income from operations divided by net revenues. ** Not meaningful. Net revenues in the region for 2012 were down slightly from 2011 , due mainly to increased competitive pressures from new competition in Biloxi, Mississippi beginning in May 2012 and Baton Rouge, Louisiana beginning in September 2012, as well as the negative impact from Hurricane Isaac in the third quarter 2012. Spend per trip in the region increased while trips to the region's properties declined. Loss from operations was $222.3 million in 2012 , compared with income from operations of $122.0 million in 2011 . This change was due mainly to non-cash impairment charges during 2012 of $334.7 million , comprised of intangible asset impairment charges of $153.2 million related to goodwill, $1.0 million related to gaming rights and tangible asset impairment charges of $180.5 million related to a halted development project in Biloxi, Mississippi. We also recorded a non-cash charge of $20.2 million in 2012 related to exit activities associated with the halted project. Louisiana/Mississippi region net revenues decreased $89.0 million , or 7.5% , for 2011 from 2010 due to a decrease in trips, which were negatively impacted by the temporary closure of three properties in the first half of 2011 due to flooding and severe weather conditions. Income from operations increased $52.1 million , or 74.5% , in 2011 from 2010 . This increase was due mainly to reduced property operating expenses and a $48.0 million decrease from 2010 in impairment charges related to goodwill and other non-amortizing intangible assets, partially offset by the impact of lower revenues. Certain costs incurred during 2011 in connection with the closures of several properties due to flooding were not expensed but instead were recovered from, or recorded as receivables from, third-party insurance providers. 40 Percent Favorable/(Unfavorable) (Dollars in millions) 2012 2011 2010 2012 vs 2011 2011 vs 2010 Casino revenues $ 999.7 $ 1,012.0 $ 1,096.4 (1.2 )% (7.7 )% Net revenues 1,101.9 1,104.4 1,193.4 (0.2 )% (7.5 )% (Loss)/income from operations (222.3 ) 122.0 69.9 ** 74.5 % Operating margin* (20.2 )% 11.0 % 5.9 % (31.2) pts 5.1 pts Iowa/Missouri Region The following results for all periods exclude the Harrah's St. Louis casino which has been classified as a discontinued operation as a result of the sale of this property in 2012. ____________________ * Operating margin is calculated as income from operations divided by net revenues. Net revenues during 2012 decreased $6.9 million or 1.5% from 2011 due to declines in casino revenues. Spend per trip increased while trips to the properties in the region declined, primarily as a result of the new competition in the Kansas City market beginning in the first quarter 2012. However, income from operations increased for 2012 from 2011 due mainly to reduced property operating expenses resulting from cost-savings initiatives. Iowa/Missouri region net revenues declined $6.3 million , or 1.3% , for 2011 from 2010 as the impact of higher spend per trip was more than offset by lower trips largely resulting from modifications to marketing programs to certain customer segments. For 2011 , income from operations was relatively flat compared with 2010 as the decrease in net revenues was offset by lower property operating expenses as a result of our cost reduction activities. Illinois/Indiana Region ____________________ * Operating margin is calculated as income from operations divided by net revenues. Net revenues in 2012 decreased $9.1 million , or 0.9% from 2011 due primarily to a slight decline in casino revenues. Also, in the fourth-quarter 2011 we recognized revenues of $7.4 million related to the receipt of business interruption insurance proceeds for lost profits caused by property closures earlier that year due to flooding, with no comparable amounts received in 2012. These declines were partially offset by a $6.8 million decrease in promotional allowances. Trips were down year over year, due in part to continued competitive pressures in the region, despite the reopening earlier this year of the bridge that allows direct access by customers to the Company’s Southern Indiana property, which closed in September 2011. Spend per trip was also down. However, income from operations for 2012 increased from 2011, due mainly to reduced property operating expenses as a result of cost-savings initiatives. Despite an increase in spend per trip, Illinois/Indiana region net revenues decreased $100.6 million , or 8.7% , for 2011 from 2010 , as trips declined due to the impact of temporary closures of four properties in the first half of 2011 as a result of flooding and severe weather conditions, reduced access to one of our properties in the region resulting from a bridge closure beginning in the first week of September 2011 that reopened in February 2012, and new competition. Income from operations for 2011 increased $26.8 million , or 22.5% , to $145.8 million from $119.0 million in 2010 . This increase was primarily due to lower property operating expenses and a $58.0 million decrease from 2010 in impairment charges related to goodwill and other non-amortizing intangible assets, partially offset by the impact of lower revenues and a favorable $23.5 million property tax adjustment recorded in the fourth quarter of 2010 that did not recur in 2011. 41 Percent Favorable/(Unfavorable) (Dollars in millions) 2012 2011 2010 2012 vs 2011 2011 vs 2010 Casino revenues $ 428.0 $ 435.7 $ 442.3 (1.8 )% (1.5 )% Net revenues 459.8 466.7 473.0 (1.5 )% (1.3 )% Income from operations 123.1 105.6 105.4 16.6 % 0.2 % Operating margin* 26.8 % 22.6 % 22.3 % 4.1 pts 0.3 pts Percent Favorable/(Unfavorable) (Dollars in millions) 2012 2011 2010 2012 vs 2011 2011 vs 2010 Casino revenues $ 1,001.3 $ 1,010.9 $ 1,152.9 (0.9 )% (12.3 )% Net revenues 1,050.4 1,059.5 1,160.1 (0.9 )% (8.7 )% Income from operations 156.0 145.8 119.0 7.0 % 22.5 % Operating margin* 14.9 % 13.8 % 10.3 % 1.1 pts 3.5 pts Other Nevada Region ____________________ * Operating margin is calculated as (loss)/income from operations divided by net revenues. ** Not meaningful. Net revenues in 2012 decreased $13.3 million or 3.0% from 2011 due largely to a decline in casino revenues resulting from the challenging competitive environment in the region during 2012. Trips and spend per trip declined in 2012 compared with 2011. Loss from operations in 2012 was $23.6 million compared with income from operations of $46.6 million . This change was due mainly to non-cash intangible asset impairment charges of $74.0 million recorded in 2012, primarily comprised of intangible asset impairment charges of $42.0 million related to goodwill and $32.0 million related to gaming rights. The impact of the above charges was partially offset by a decrease in property operating expenses. Net revenues in the Other Nevada region for 2011 increased slightly from 2010 as an increase in number of trips more than offset a decrease in spend per trip. Income/(loss) from operations improved by $60.5 million for 2011 from 2010 primarily due to a $49.0 million decrease in impairment charges related to goodwill and other non-amortizing intangible assets, higher net revenues and lower property operating expenses. Managed, International and Other The Managed region includes companies that operate three Indian-owned casinos, as well as Horseshoe Cleveland and Caesars Windsor, and the results of Thistledown through August 2012 when the racetrack was contributed to Rock Ohio Caesars, LLC, a venture in which we hold a 20% ownership interest. Subsequent to August 2012, the Managed region includes the results of the subsidiary that will manage Thistledown once it commences video lottery terminal operations, which is expected to occur in the second quarter 2013. See Note 3 , " Acquisitions, Investments, Dispositions and Divestitures ,” to our consolidated financial statements appearing in Item 8 of this report for further discussion. The International region includes the results of our international operations. The Other region is comprised of corporate expenses, including administrative, marketing, and development costs, income from certain non-consolidated affiliates, and the results of Caesars Interactive Entertainment, Inc. ("CIE"), which consists of the businesses related to the World Series of Poker brand, an online real-money business in the U.K. and alliances with online gaming providers in Italy and France, and the results of Playtika Ltd., a social and mobile games developer. 42 Percent Favorable/(Unfavorable) (Dollars in millions) 2012 2011 2010 2012 vs 2011 2011 vs 2010 Casino revenues $ 336.0 $ 349.8 $ 351.0 (3.9 )% (0.3 )% Net revenues 436.7 450.0 447.5 (3.0 )% 0.6 % (Loss)/income from operations (23.6 ) 46.6 (13.9 ) ** ** Operating margin* (5.4 )% 10.4 % (3.1 )% (15.8) pts 13.5 pts In the fourth quarter 2012, we began discussions with interested investors on a sale of the subsidiaries that hold our land concession in Macau. As a result of this plan of disposal, the assets and liabilities have been classified as held for sale at December 31, 2012 and 2011 and its operating results have been classified as discontinued operations for all periods presented and are excluded from the table below. For 2012 , net revenues increased $186.2 million , or 29.1% , from 2011 due mainly to increases associated with CIE, as well as increased revenues from our new managed casino, Horseshoe Cleveland, which opened in May 2012, including an increase in reimbursable expenses for Horseshoe Cleveland that is presented on a gross revenue basis, resulting in an increase in net revenues and an equally offsetting increase in operating expenses. Loss from operations increased $201.9 million , or 112.9% , from 2011 , due mainly to non-cash intangible asset impairment charges of $206.0 million related to trademarks, compared with non-cash intangible and tangible asset impairments of $29.8 million in 2011. Also contributing to the higher loss from operations are increases in corporate expense of $42.2 million resulting from the consolidation of certain functions at corporate and increased pension accruals and stock based compensation expense, partially offset by the income impact of increased revenues and a decrease of $19.0 million in write-downs, reserves, and project opening costs, net of recoveries related to lower efficiency project costs. Net revenues in the Managed, International, and Other businesses, for 2011 , increased $96.0 million , or 17.6% , from 2010 due mainly to increases in spend per trip at our Uruguay and London Clubs properties and to the addition of revenues from our 2011 acquisition of Playtika. Net revenues for 2011 increased despite declines experienced by our two properties in Egypt due to uprisings earlier in the year. Loss from operations decreased $52.1 million , or 22.6% , due to the strong performance of our international businesses and the results of our online businesses, and by an $18.0 million decrease from 2010 in impairment charges related to goodwill and other non-amortizing intangible assets, partially offset by lower results at Thistledown. Other Factors Affecting Net Income ____________________ ** Not meaningful. 43 Percent Favorable/(Unfavorable) (Dollars in millions) 2012 2011 2010 2012 vs 2011 2011 vs 2010 Net revenues Managed $ 89.5 $ 48.1 $ 43.9 86.1 % 9.6 % International 461.5 458.7 428.1 0.6 % 7.1 % Other 275.7 133.7 72.5 106.2 % 84.4 % Total net revenues $ 826.7 $ 640.5 $ 544.5 29.1 % 17.6 % Income/(loss) from operations Managed $ 7.0 $ 6.0 $ 11.9 16.7 % (49.6 )% International 37.4 54.9 26.9 (31.9 )% 104.1 % Other (425.1 ) (239.7 ) (269.7 ) (77.3 )% 11.1 % Total loss from operations $ (380.7 ) $ (178.8 ) $ (230.9 ) (112.9 )% 22.6 % Expense/(income) Percent Favorable/(Unfavorable) (Dollars in millions) 2012 2011 2010 2012 vs 2011 2011 vs 2010 Interest expense, net of interest capitalized $ 2,101.3 $ 2,122.3 $ 1,981.6 (1.0 )% 7.1 % Gains on early extinguishments of debt (136.0 ) (47.9 ) (115.6 ) 183.9 % (58.6 )% Benefit for income taxes (870.5 ) (534.7 ) (492.5 ) 62.8 % 8.6 % Loss/(income) from discontinued operations, net of income taxes 109.5 (31.4 ) (26.1 ) ** 20.3 % Interest Expense, Net of Interest Capitalized Interest expense, net of interest capitalized decreased $21.0 million from 2011. During 2011, we recorded a $183.2 million charge to interest expense as a result of our determination that our interest rate swap agreements no longer qualified as hedging instruments for accounting purposes. Excluding the impact of this 2011 charge, interest expense increased in 2012 by $162.2 million as a result of higher interest rates and debt balances in 2012 compared with 2011. Interest expense for 2012 included (i) $29.6 million of gains due to changes in fair value for derivatives not designated as hedging instruments and (ii) $28.4 million of expense due to amortization and reclassification of deferred losses on derivative instruments frozen in Accumulated Other Comprehensive Loss ("AOCL"). Interest expense is reported net of interest capitalized of $38.2 million and $22.8 million for 2012 and 2011 , respectively. Interest capitalized in 2012 is primarily related to Project Linq. Interest expense, net of interest capitalized increased by $140.7 million for 2011 , compared to the same period in 2010 . Interest expense is reported net of interest capitalized of $22.8 million and $1.4 million for 2011 and 2010 , respectively. The majority of the interest capitalized in 2011 relates to the completion of the Octavius Tower at Caesars Palace Las Vegas. Prior to the consideration of interest capitalized, interest expense increased by $162.1 million for 2011 , compared to 2010 . During the fourth quarter 2011, we amended certain of our interest rate swap agreements and modified the interest rate election on a portion of our portfolio of underlying term loans. As a result, we determined that all of our interest rate swap agreements no longer qualified as hedging instruments for accounting purposes, and therefore we reclassified $183.2 million of accumulated other comprehensive losses into interest expense. Prior to consideration of this non-cash charge, interest expense decreased by $21.1 million for 2011 from the same period in 2010 . Incremental interest expense associated with debt issued in April 2011 to complete our Linq and Octavius projects was more than offset by reduced interest associated with debt retired in connection with the fourth quarter 2010 exchange of debt for equity. Interest expense was favorably impacted by lower interest rates obtained through the amendments to our interest rate swap agreements completed in the second quarter of 2011. Interest expense for 2011 , as a result of interest rate swap agreements and interest rate cap agreements, included (i) $53.4 million of gains due to measured ineffectiveness for derivatives designated as hedging instruments; (ii) $16.9 million of gains due to changes in fair value for derivatives not designated as hedging instruments; and (iii) $265.7 million of expense due to amortization and reclassification of deferred losses frozen in AOCL. For additional discussion of interest expense, refer to Note 8 , “ Debt ,” and Note 17 , " Supplemental Cash Flow Information ," to our consolidated financial statements, in Item 8 of this report. Gains on Early Extinguishments of Debt During 2012 , we purchased $367.3 million of aggregate face value of CMBS Loans for $229.3 million , recognizing total pre-tax gains on early extinguishments of debt of $135.0 million , net of deferred finance charges. During 2011 , we recognized a $47.9 million gain on early extinguishments of debt as the result of March and April 2011 CMBS Loan repurchases. During 2010 , we recognized $115.6 million of gains on early extinguishments of debt as a result of repurchases of CMBS Loans and completion of an offering that retired outstanding senior and senior subordinated notes. For additional discussion of extinguishments of debt, refer to Note 8 , “ Debt ,” to our consolidated financial statements, in Item 8 of this report. Tax Rate Benefit The full year effective tax rate benefit for 2012 , 2011 and 2010, was 38.6% , 43.4% and 36.7%, respectively. The year-over-year decrease in the effective tax rate benefit for 2012 was, primarily, due to (i) nondeductible goodwill impairments in 2012 , (ii) a decrease in the tax benefit from foreign operations in 2012 mostly related to the effect of providing deferred taxes on unremitted earnings from foreign subsidiaries in Uruguay that are no longer permanently reinvested, (iii) a decrease in state deferred tax benefits recognized in 2012 relative to 2011 mostly as a result of a state restructuring completed in 2011 , and (iv) deferred tax benefits recognized in 2011 from a correction of the deferred tax liabilities, which were partially offset by tax benefits recognized in 2012 from the decrease of uncertain tax positions relating to the settlement of a foreign matter and our IRS examinations. The year-over-year increase in the effective tax rate benefits for 2011 was primarily due to (i) a deferred tax benefit of $46.4 million from a correction of an error in the deferred tax liabilities primarily relating to transaction costs incurred in connection with the acquisition in 2008 that were incorrectly recorded in 2008 and not properly adjusted upon the 2009 receipt of the final transaction cost reports, (ii) state deferred tax benefits resulting from the reorganization of certain of the Company's state operations, and (iii) other discrete items. 44 Under the American Recovery and Reinvestment Act of 2009, or the ARRA, we received temporary federal tax relief under the Delayed Recognition of Cancellation of Debt Income, or CODI, rules. The ARRA contains a provision that allowed for a deferral for tax purposes of CODI for debt reacquired in 2009 and 2010, following by recognition of CODI ratably from 2014 to 2018. In connection with the debt that we reacquired in 2009 and 2010, we deferred related CODI of $3.5 billion for tax purposes (net of Original Issue Discount ("OID") interest expense, some of which must also be deferred to 2014 through 2018 under the ARRA). We are required to include one-fifth of the deferred CODI, net of deferred and regularly scheduled OID, in taxable income each year from 2014 through 2018. For state income tax purposes, certain states have conformed to the Act and others have not. In March 2013, we made a “Check-the-Box” election for one of our foreign entities to treat that entity as a partnership for U.S. federal income tax purposes effective at the end of December 2012. As a result of the election, the foreign entity will be deemed to completely liquidate for U.S. federal income tax purposes. The deemed liquidation will produce a capital loss for federal income tax purposes that will be used to offset capital gains resulting from the 2012 sale of our Harrah's St. Louis casino. We estimate that the utilization of the capital loss will result in a federal income tax benefit of approximately $105 million in first quarter 2013 with a corresponding increase to our net operating loss deferred tax asset. Refer to Note 13 “ Income Taxes ,” to our consolidated financial statements, included in Item 8 of this report, for additional information. Loss/(income) from discontinued operations, net of income taxes Loss from discontinued operations, net of income taxes for 2012 was $109.5 million compared with income from discontinued operations, net of income taxes of $31.4 million in 2011. This change was due mainly to a $101.0 million non-cash impairment charge recorded in 2012 related to the Company's land concession in Macau and $63.9 million of income taxes related to the sale of the Harrah's St. Louis casino. For 2011, income from discontinued operations, net of income taxes increased $5.3 million from 2010 due mainly to an increase in net income related to the operations of the Harrah's St. Louis casino. Liquidity and Capital Resources Cost Savings Initiatives Caesars Entertainment has undertaken comprehensive cost-reduction efforts to rightsize expenses with business levels through its implementation of "Project Renewal," an initiative designed to reinvent certain aspects of the Company's functional and operating units to gain significant further cost reductions and streamline our operations. As part of Project Renewal, we implemented a shared-services organization that enables more efficient decision making and sharing of best practices. We believe that this organization provides us with a permanently lower cost structure and that we benefit from a greater concentration of specified talent and quicker decision making. We estimate that Project Renewal and other cost-savings programs produced $190.8 million in incremental cost savings for the year ended December 31, 2012 compared with 2011 . Additionally, as of December 31, 2012 , we expect that these and additional new cost-savings programs will produce additional annual cost savings of $212.8 million , based on the full implementation of current projects that are in process. As we realize savings or identify new cost-reduction activities, this amount will change. Capital Spending and Development We incur capital expenditures in the normal course of business, and we perform ongoing refurbishment and maintenance at our existing casino entertainment facilities, to maintain our quality standards. We also continue to pursue development and acquisition opportunities for additional casino entertainment and other hospitality facilities, as well as online businesses that meet our strategic and return on investment criteria. Cash used for capital expenditures in the normal course of business is typically made available from cash flows generated by our operating activities and established debt programs, while cash used for development projects, including projects currently under development as well as additional projects being pursued, is typically funded from established debt programs, specific project financing, and additional debt offerings. As a result of the sale of the Harrah's St. Louis casino, the Company has been using and will continue to use the net proceeds from the sale to fund CEOC capital expenditures. Proceeds not used for capital expenditures are required to be used to purchase term loans under the Credit Facilities. These proceeds are reflected in our Consolidated Statements of Cash Flows as cash inflows related to investing activities of discontinued operations. 45 Our planned development projects, if they proceed, will require, individually and in the aggregate, significant capital commitments and, if completed, may result in significant additional revenues. The commitment of capital, the timing of completion, and the commencement of operations of development projects are contingent upon, among other things, negotiation of final agreements and receipt of approvals from the appropriate political and regulatory bodies. We must also comply with covenants and restrictions set forth in our debt agreements. Our capital spending for the year ended December 31, 2012 totaled $507.7 million , net of an increase of $49.0 million of related payables. Estimated total capital expenditures for 2013 , including 2013 expenditures associated with Project Linq, the Bill's renovation, and other developments for which we expect to obtain financing, are expected to be between $1,150.0 million and $1,250.0 million which includes approximately $300 million of 2013 project financing associated with Project Linq, the Bill's renovation, and other developments for which we expect to obtain financing. Liquidity and Capital Resources Effective February 8, 2012, as the result of our initial public offering, our common stock trades on the NASDAQ Global Select Market under the symbol “CZR.” The net proceeds from our initial public offering were approximately $15.2 million, taking into account expenses and underwriting commissions, and giving effect to the exercise of the underwriters' overallotment option. In connection with the public offering, we effected a 1.742-for-one split of our common stock. In March 2012, we filed a prospectus with the SEC, as part of a registration statement, to sell shares of our common stock, up to a maximum aggregate offering price of $500.0 million, and, in April 2012, we entered into an equity distribution agreement whereby we may issue and sell up to 10.0 million shares of our common stock from time to time. Our cash and cash equivalents, excluding restricted cash, totaled $1,757.5 million at December 31, 2012 compared to $891.2 million at December 31, 2011 . Restricted cash totaled $1,198.2 million at December 31, 2012 , the current portion of which includes the $750.0 million of proceeds from our December 2012 debt offering that were placed into escrow until February 20, 2013, when escrow conditions were satisfied. Nearly all of the remaining restricted cash consists of cash reserved under loan agreements for development projects and certain expenditures incurred in the normal course of business, such as interest service, real estate taxes, property insurance, and capital improvements. Our operating cash inflows are typically used for operating expenses, debt service costs, working capital needs, and capital expenditures in the normal course of business. Our cash flows from operating, investing, and financing activities for the twelve months ended December 31, 2012 , 2011 and 2010 associated with the Harrah's St. Louis casino and the subsidiaries that hold our land concession in Macau, which are defined as discontinued operations, are included in our Consolidated Statements of Cash Flows as cash flows from discontinued operations. We sold the Harrah's St. Louis casino on November 2, 2012 , and the net proceeds generated from the sale are being used and will continue to be used to fund CEOC capital expenditures. Proceeds not used for capital expenditures are required to be used to purchase term loans under the Credit Facilities. We are a highly leveraged company and a significant amount of our liquidity needs are for debt service. As of December 31, 2012 , we had $21,412.1 million book value of indebtedness outstanding, including capital lease indebtedness. This amount includes the December 2012 debt offering of $750.0 million which is classified as current in our Consolidated Balance Sheet at December 31, 2012 due to escrow conditions not being satisfied until February 20, 2013. Cash paid for interest for the year ended December 31, 2012 was $1,771.9 million . Payments of short-term debt obligations, other than the $750.0 million described above, and payments of other commitments, are expected to be made from operating cash flows and from borrowings under our established debt programs. Long-term obligations are expected to be paid through operating cash flows, refinancing of debt, or, if necessary, additional debt or equity offerings. In addition to cash flows from operations, available sources of cash include amounts available under our current revolving credit facility. At December 31, 2012 , our additional borrowing capacity under the credit facility was $317.7 million . In recent years, we have not been generating sufficient operating cash flows to fund our investing activities, requiring us to fund our investments with additional financing. Our ability to fund our operations and pay our debt and debt service obligations depends, in part, upon economic and other factors that are beyond our control, and disruptions in capital markets and restrictive covenants related to our existing debt could impact our ability to secure additional funds through financing activities. 46 From time to time, depending upon market, pricing, and other conditions, as well as on our cash balances and liquidity, we or our affiliates may seek to acquire notes or other indebtedness of the Company through open market purchases, privately negotiated transactions, tender offers, redemption or otherwise, upon such terms and at such prices as we or our affiliates may determine (or as may be provided for in the indentures governing the notes), for cash or other consideration. In addition, we have considered and will continue to evaluate potential transactions to reduce net debt, such as debt for debt exchanges and other transactions. There can be no assurance as to which, if any, of these alternatives or combinations thereof we or our affiliates may choose to pursue in the future as the pursuit of any alternative will depend upon numerous factors such as market conditions, our financial performance, and the limitations applicable to such transactions under our financing documents. Please refer to Note 8 , “ Debt ," to our consolidated financial statements appearing in Item 8 of this report for details on our debt outstanding. This detail includes, among other things, a table presenting details on our individual borrowings outstanding as of December 31, 2012 and 2011, changes in our debt outstanding and certain changes in the terms of existing debt for the year ended December 31, 2012 . Note 8 , “ Debt ," to our consolidated financial statements appearing in Item 8 of this report also includes details on interest and fees and restrictive covenants related to certain of our borrowings. Note 9 , " Derivative Instruments ," to our consolidated financial statements appearing in Item 8 of this report discusses the use of interest rate swap and interest rate cap derivatives to manage the mix of our debt between fixed and variable rate instruments. CEC is pursuing a strategic transaction that contemplates the transfer of certain of its assets that are not part of the collateral package for the Credit Facilities or the secured notes issued by CEOC, including unencumbered assets of CEC and unrestricted subsidiaries of CEOC, to a newly created entity, named Caesars Growth Venture Partners (“CGVP”), which is anticipated to be controlled by common parties that control CEC. CGVP would be a growth oriented vehicle focused on projects that are complementary to CEC's existing properties. We anticipate that CEC would own a significant portion of CGVP's equity interests and that subsidiaries of CEC would manage new casino properties owned by CGVP. We are pursuing this transaction because we believe it will improve our liquidity and credit profile, enhance our distribution network and provide additional support for potential new ventures. It is currently contemplated that the following assets would be transferred: (i) Planet Hollywood, (ii) investment in a casino project under development in Baltimore, Maryland, (iii) interest in a portion of the management fee revenues of the management companies for Planet Hollywood and the casino to be developed in Baltimore, Maryland, (iv) shares of Caesars Interactive Entertainment, Inc.'s outstanding common stock held by HIE Holdings, Inc., a subsidiary of CEC, and (v) approximately $1.1 billion face value of senior notes issued by CEOC held by Harrah's BC, Inc. It is anticipated the Sponsors would participate in the transaction and that CEC's other shareholders would have the opportunity to participate on the same terms. The form of consideration to CEC is expected to be equity interests and cash, and any consideration to CEOC is expected to be cash, in each case at fair value. There is no current intention that this transaction will involve CEC's outstanding CMBS financing. There are no commitments with respect to any such transaction and there have been no agreements with respect to price or value. The transfer of such assets would require the approval of regulators and other third parties, which we may not be able to obtain. Therefore, we cannot assure you that any such transaction will be entered into or consummated or, if consummated, describe the impact the transaction would have on us. CEOC Bond Offerings In February 2012, CEOC completed the offering of $1,250.0 million aggregate principal amount of 8.5% senior secured notes due 2020. CEOC used $1,095.6 million of the net proceeds from this transaction to repay a portion of the Credit Facilities in connection with the consummation of the transactions as further described under the CEOC Credit Facilities section below. In August 2012, CEOC completed the offering of $750.0 million aggregate principal amount of 9% senior secured notes due 2020. CEOC used $478.8 million of the net proceeds from this transaction to repay a portion of the Credit Facilities in connection with the consummation of the transactions as further described under the CEOC Credit Facilities section below. In December 2012, CEOC completed the offering of $750.0 million aggregate principal amount of 9% senior secured notes due 2020, the proceeds of which were placed into escrow. Upon release from escrow, we will use the net proceeds from this offering to pay related fees and expenses and for general corporate purposes, which may include capital expenditures and the repayment, redemption, retirement or repurchase in the open market of a portion of our outstanding indebtedness. In addition, we intend to retire or refinance approximately $350 million of our outstanding indebtedness, based on prevailing prices and market and other considerations existing at the time. On February 20, 2013, the escrow conditions were satisfied. 47 In February 2013 , CEOC completed the offering of $1,500.0 million aggregate principal amount of 9% senior secured notes due 2020 (the " February 2013 notes"), the proceeds of which were placed into escrow. Upon release from escrow, we plan to use the net proceeds of the February 2013 notes offering to repay a portion of CEOC's existing term loans at par, with such repayment being applied: first, to all outstanding B-1 , B-2 , and B-3 term loans held by consenting lenders; second, to B-5 and B-6 term loans held by consenting lenders, in an amount up to 20% of the principal amount of the B-5 and B-6 term loans; and third, if any proceeds remain outstanding, to outstanding term loans as CEOC elects in its discretion, and to pay related fees and expenses. In connection with the February 2013 notes offering, CEOC received the requisite lenders’ consents and entered into a bank amendment to its Credit Facilities to, among other things: (i) use the net cash proceeds of February 2013 notes offering to repay a portion of CEOC’s existing term loans as described above; (ii) obtain up to $75.0 million of extended revolving facility commitments with a maturity of January 28, 2017 , (iii) increase the accordion capacity under the Credit Facilities by an additional $650.0 million (which may be used, among other things, to establish extended revolving facility commitments under the Credit Facilities); (iv) modify the calculation of the senior secured leverage ratio for purposes of the maintenance test under the Credit Facilities to exclude the February 2013 notes; and (v) modify certain other provisions of the Credit Facilities. The effectiveness of this proposed bank amendment and related transactions are subject to regulatory approval and other conditions. CEOC Credit Facilities A substantial portion of our financing is comprised of credit facility and notes financing obtained by CEOC. The CEOC financings are neither secured nor guaranteed by Caesars’ other subsidiaries, including certain subsidiaries that own properties that secure $4,664.1 million face value, as of December 31, 2012 , of the CMBS loans. Information pertaining solely to the consolidated financial position and results of CEOC and its subsidiaries can be found in Exhibit 99.1 to this Form 10-K. During 2012, we (i) extended the maturity of $3,812.3 million B-1, B-2 and B-3 term loans held by consenting lenders from January 28, 2015 to January 28, 2018 and increased the interest rate with respect to such extended term loans (the “Term B-6 Loans”), (ii) converted $457.8 million original maturity revolver commitments held by consenting lenders to Term B-6 Loans and promptly following such conversion, repaid $1,574.3 million of term loans held by any consenting lender, (iii) extended the maturity of $37.2 million original maturity revolver commitments held by consenting lenders who elected not to convert their commitments to term loans from January 28, 2014 to January 28, 2017 and increased the interest rate and the undrawn commitment fee with respect to such extended revolver commitments, and upon the effectiveness of such extension, terminated $798.5 million of revolver commitments and increased the amount of outstanding Term B-6 Loans by $2,853.8 million, and (iv) modified certain other provisions of the Credit Facilities. The Term B-6 Loans have a springing maturity to April 14, 2017 if more than $250.0 million of CEOC's 11.25% senior secured notes due 2017 remain outstanding on April 14, 2017. In addition to the foregoing, CEOC may elect to extend and/or convert additional term loans and/or revolver commitments from time to time. As of December 31, 2012 , our Credit Facilities provide for senior secured financing of up to $6,480.6 million , consisting of (i) senior secured term loan facilities in an aggregate principal amount of $6,072.3 million with $1,025.8 million maturing on January 28, 2015, $970.0 million maturing on October 31, 2016 , and $4,076.5 million maturing on January 28, 2018 , (ii) a senior secured revolving credit facility in an aggregate principal amount of up to $408.3 million , with $377.2 million maturing January 28, 2014, and $31.1 million maturing January 28, 2017, including both a letter of credit sub-facility and a swingline loan sub-facility. The term loans under the Credit Facilities require scheduled quarterly payments of $3.1 million , with the balance due at maturity. As of December 31, 2012 , $90.6 million of the revolving credit facility is committed to outstanding letters of credit. After consideration of the letter of credit commitments, $317.7 million of additional borrowing capacity was available to the Company under its revolving credit facility as of December 31, 2012 . The following table summarizes the annual maturities of the face value of our long-term debt as of December 31, 2012 . ____________________ 48 (In millions) 2013 (2) 2014 2015 2016 2017 Thereafter Total Actual (1) $ 905.1 $ 74.7 $ 6,839.5 $ 1,709.7 $ 2,735.3 $ 11,838.8 $ 24,103.1 (1) Maturities assume our exercise of the extension options of the CMBS Loans and PWH Las Vegas senior secured loan to 2015 . (2) Includes the note offering that occurred in December 2012 . Although the notes mature in 2020 , $750.0 million face value notes offered in December 2012 are classified as short-term obligations within our December 31, 2012 balance sheet because the escrow conditions were not met as of that date. Subsequent to December 31, 2012, we consummated additional extension transactions with consenting lenders under our Credit Facilities and amended our Credit Facilities as follows: In January and February 2013, CEOC converted $267.8 million aggregate principal amount of original maturity revolver commitments held by consenting lenders to Term B-6 Loans, repaid $133.9 million principal amount of term loans of extending lenders, terminated $267.8 million principal amount of revolving commitments of extending lenders, and increased the amount of outstanding Term B-6 Loans by $133.9 million . In February 2013, CEOC amended its Credit Facilities in connection with the February 2013 notes offering discussed in the CEOC Bond Offerings section above. CMBS Financing During 2012, we purchased $367.3 million of aggregate face value of CMBS loans for $229.3 million, recognizing total pre-tax gains of $135.0 million, net of deferred finance charges. In February 2013 , we exercised the option to extend the maturity of the CMBS Financing to 2014 . The loan contains an additional extension option to extend its maturity from 2014 to 2015 , subject to certain conditions. As part of the extension, we entered into a new interest rate cap agreement. The interest rate cap agreement, which is effective from February 13, 2013 and terminates February 13, 2015 , is for a notional amount of $4,664.1 million at a LIBOR cap rate of 4.5% . Any future changes in fair value of the interest rate cap will be recognized in interest expense during the period in which the changes in value occur. Other Financing Transactions In February 2012 , Chester Downs issued $330.0 million aggregate principal amount of 9.25% senior secured notes due 2020 through a private placement. Chester Downs used $232.4 million of the proceeds of the notes to repay the term loan due 2016 plus accrued interest and a prepayment penalty. The remaining proceeds were used to make a distribution to Chester Downs' managing member, Harrah's Chester Downs Investment Company, LLC, a wholly-owned subsidiary of CEOC, and for other general corporate purposes. During the second quarter of 2012 , a subsidiary of Caesars Entertainment purchased $5.9 million face value of CEOC debt for $3.2 million recognizing a pre-tax gain of $1.0 million , net of deferred finance charges. In June 2012 , a subsidiary of Caesars Entertainment issued a non-interest bearing convertible promissory note in the amount of $28.5 million . In November 2012 , a subsidiary of Caesars Entertainment issued an additional non-interest bearing convertible promissory note in the amount of $19.2 million . See Note 10 , “ Stockholders' Equity, Non-controlling Interests and Loss Per Share ," for more information. Debt Covenant Compliance and Restrictions The Credit Facilities require compliance on a quarterly basis with a maximum net senior secured first lien debt leverage test. In addition, the Credit Facilities include negative covenants, subject to certain exceptions, restricting or limiting CEOC’s ability and the ability of its restricted subsidiaries to, among other things: (i) incur additional debt; (ii) create liens on certain assets; (iii) enter into sale and lease-back transactions; (iv) make certain investments, loans, and advances; (v) consolidate, merge, sell, or otherwise dispose of all or any part of its assets or to purchase, lease, or otherwise acquire all or any substantial part of assets of any other person; (vi) pay dividends or make distributions or make other restricted payments; (vii) enter into certain transactions with its affiliates; (viii) engage in any business other than the business activity conducted at the closing date of the loan or business activities incidental or related thereto; (ix) amend or modify the articles or certificate of incorporation, by-laws, and certain agreements or make certain payments or modifications of indebtedness; and (x) designate or permit the designation of any indebtedness as “Designated Senior Debt.” Caesars Entertainment is not bound by any financial or negative covenants contained in CEOC’s credit agreement, other than with respect to the incurrence of liens on and the pledge of its stock of CEOC. All borrowings under the senior secured revolving credit facility are subject to the satisfaction of customary conditions, including the absence of a default, the accuracy of representations and warranties, and the requirement that such borrowing does not reduce the amount of obligations otherwise permitted to be secured under our Credit Facilities without ratably securing the retained notes. 49 Certain of our borrowings have covenants and requirements that include, among other things, the maintenance of specific levels of financial ratios. Failure to comply with these covenants can result in limiting our long-term growth prospects by hindering our ability to incur future indebtedness or grow through acquisitions, or cause an event of default. Specifically, the Credit Facilities require CEOC to maintain a senior secured leverage ratio of no more than 4.75 to 1.0 , which is the ratio of senior first priority secured debt to last twelve months ("LTM") Adjusted EBITDA - Pro Forma - CEOC Restricted. This ratio excludes $2,200.0 million of first priority senior secured notes and up to $350.0 million aggregate principal amount of consolidated debt of subsidiaries that are not wholly owned. This ratio also reduces the amount of senior first priority secured debt by the amount of unrestricted cash on hand. As of December 31, 2012 , CEOC's senior secured leverage ratio was 4.44 to 1.0 . In February 2013, CEOC amended its Credit Facilities to, among other things, modify the calculation of the senior secured leverage ratio for purposes of the maintenance test under the Credit Facilities to additionally exclude the $1,500.0 million February 2013 notes as described in the CEOC Bond Offerings section above. The effectiveness of this proposed Credit Facility amendment and related transactions are subject to certain conditions, including required regulatory approvals. Once effective, we expect this amendment will provide us with additional flexibility under our senior secured leverage ratio. We are in compliance with CEOC’s Credit Facilities and indentures, including the senior secured leverage ratio, as of December 31, 2012 . In order to comply with the quarterly senior secured leverage ratio in the future, the Company will need to achieve a certain amount of LTM Adjusted EBITDA - Pro-Forma - CEOC Restricted and/or reduced levels of total senior secured net debt (total senior secured debt less unrestricted cash). The factors that could impact the foregoing include (a) changes in gaming trips, spend per trip and hotel metrics, which are correlated to a consumer recovery, (b) ability to effect cost-savings initiatives, (c) asset sales, (d) issuing additional second lien or unsecured debt, or project financing, (e) equity financings, (f) delays in development project spending, or (g) a combination thereof. In addition, under certain circumstances, our Credit Facilities allow us to apply cash contributions received by CEOC as an increase to LTM Adjusted EBITDA - Pro Forma - CEOC Restricted if CEOC is unable to meet its senior secured leverage ratio. However, there is no guarantee that such contributions will be forthcoming. Based upon the Company's current operating forecast, as well as our ability to achieve one or more of the factors noted above, and assuming the effectiveness of the Credit Facility amendment discussed above, the Company believes that it will continue to be in compliance with the senior secured leverage ratio and meet its cash flow needs during the foreseeable future, including the next twelve months. If the Company is unable to maintain compliance with the senior secured leverage ratio and the Company fails to remedy a default pursuant to the terms of its Credit Facilities, there would be an “event of default” under the senior secured credit agreement. We cannot assure you that our business will generate sufficient cash flows from operations, that we will be successful in sales of assets, or that future borrowings will be available to us, to fund our liquidity needs and pay our indebtedness when due. If we are unable to meet our liquidity needs or pay our indebtedness when it is due, we may be required to further reduce expenses, sell additional assets, or attempt to restructure our debt. Any such actions could negatively impact our competitive position and revenue generation. In addition, we have pledged a significant portion of our assets as collateral under certain of our debt agreements and, if any of those lenders accelerate the repayment of borrowings, there can be no assurance that we will have sufficient assets to repay our indebtedness. In addition, certain covenants contained in the Credit Facilities and indentures covering the Company's second priority senior secured notes and first priority senior secured notes restrict our ability to take certain actions such as incurring additional debt or making acquisitions if we are unable to meet a fixed charge coverage ratio (LTM Adjusted EBITDA - Pro Forma - CEOC Restricted to fixed charges) of at least 2.0 to 1.0 , a total first priority secured leverage ratio (first priority senior secured debt to LTM Adjusted EBITDA - Pro Forma - CEOC Restricted) of no more than 4.5 to 1.0 and/or a consolidated leverage ratio (consolidated total debt to LTM Adjusted EBITDA - Pro Forma - CEOC Restricted) of no more than 7.25 to 1.0 . As of December 31, 2012 , CEOC's total first priority secured leverage ratio and consolidated leverage ratio were 6.15 to 1.0 and 12.11 to 1.0 , respectively. For the year ended December 31, 2012 , CEOC's earnings were insufficient to cover fixed charges by $407.2 million . For purposes of calculating the fixed charge coverage ratio, fixed charges includes consolidated interest expense less interest income and any cash dividends paid on preferred stock (other than amounts eliminated in consolidation). For purposes of calculating the total first priority secured leverage ratio and the consolidated leverage ratio, the amounts of first priority senior secured debt and consolidated total debt, respectively, are reduced by the amount of unrestricted cash on hand. The covenants that provide for the fixed charge coverage ratio, total first priority secured leverage ratio and consolidated leverage ratio described in this paragraph are not maintenance covenants. 50 The indenture and other agreements governing our cash pay debt and PIK toggle debt limit CEOC’s (and most of its subsidiaries’) ability to among other things: (i) incur additional debt or issue certain preferred shares; (ii) pay dividends or make distributions in respect of our capital stock or make other restricted payments; (iii) make certain investments; (iv) sell certain assets; (v) engage in any business or own any material asset other than all of the equity interest of CEOC so long as certain investors hold a majority of the notes; (vi) create or permit to exist dividend and/or payment restrictions affecting its restricted subsidiaries; (vii) create liens on certain assets to secure debt; (viii) consolidate, merge, sell or otherwise dispose of all or substantially all of its assets; (ix) enter into certain transactions with its affiliates; and (x) designate its subsidiaries as unrestricted subsidiaries. Subject to certain exceptions, the indenture governing the notes and the agreements governing the other cash pay debt and PIK toggle debt will permit us and our restricted subsidiaries to incur additional indebtedness, including secured indebtedness. The CMBS Financing includes negative covenants, subject to certain exceptions, restricting or limiting the ability of the borrowers and operating companies under the CMBS Financing to, among other things: (i) incur additional debt; (ii) create liens on assets; (iii) make certain investments, loans, and advances; (iv) consolidate, merge, sell, or otherwise dispose of all or any part of its assets or to purchase, lease, or otherwise acquire all or any substantial part of assets of any other person; (v) enter into certain transactions with its affiliates; (vi) engage in any business other than the ownership of the properties and business activities ancillary thereto; and (vi) amend or modify the articles or certificate of incorporation, by-laws, and certain agreements. The CMBS Financing also includes affirmative covenants that require the CMBS properties to, among other things, maintain the borrowers as "special-purpose entities", maintain certain reserve funds in respect of furniture, fixtures, and equipment, taxes, and insurance, and comply with other customary obligations for CMBS real estate financings. Amounts deposited into the specified reserve funds represent restricted cash. In addition, the CMBS Financing obligates the CMBS properties to apply excess cash flow in certain specified manners, depending on the outstanding principal amount of various tranches of the CMBS loans and other factors. These obligations will limit the amount of excess cash flow from the CMBS properties that may be distributed to Caesars Entertainment. For example, the CMBS properties are required to use 100% of excess cash flow to make ongoing mandatory offers on a quarterly basis to purchase CMBS mezzanine loans at discounted prices from the holders thereof. To the extent such offers are accepted, such excess cash flow will need to be so utilized and will not be available for distribution to Caesars Entertainment. To the extent such offers are not accepted with respect to any fiscal quarter, the amount of excess cash flow that may be distributed to Caesars Entertainment is limited to 85% of excess cash flow with respect to such quarter. In addition, the CMBS Financing provides that once the aggregate principal amount of the CMBS mezzanine loans is less than or equal to $625.0 million , the mortgage loan will begin to amortize on a quarterly basis in an amount equal to the greater of 100% of excess cash flow for such quarter and $31.3 million . If the CMBS mortgage loan begins to amortize, the excess cash flow from the CMBS properties will need to be applied to such amortization and will not be available for distribution to Caesars Entertainment. As a result of the restrictions from CEOC's borrowings, CMBS Financing and other arrangements, the amount of restricted net assets of our consolidated subsidiaries held at December 31, 2012 and 2011 was approximately $1.2 billion and $1.1 billion, respectively. The amount of restricted net assets in our unconsolidated subsidiaries is not material to the financial statements. 51 Guarantees of Third-Party Debt and Other Obligations and Commitments The following table summarizes our contractual obligations and other commitments as of December 31, 2012 , prior to consideration of the 2013 capital transactions mentioned above: Critical Accounting Policies and Estimates We prepare our financial statements in conformity with accounting principles generally accepted in the United States ("GAAP"). Certain of our accounting policies, including the estimated lives assigned to our assets, the determination of bad debt, asset impairment, Total Rewards point liability, self-insurance reserves, the purchase price allocations made in connection with our acquisitions/merger, the fair value of derivative instruments, and the calculation of our income tax liabilities, require that we apply significant judgment in defining the appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty. Our judgments are based on our historical experience, terms of existing contracts, observance of trends in the industry, information provided by our customers and information available from other outside sources, as appropriate. Actual results may differ from our estimates. For a summary of our significant accounting policies, please refer to the notes to our audited consolidated financial statements included elsewhere in Item 8 of this report. We consider accounting estimates to be critical accounting policies when: 52 Contractual Obligations (a) Payments due by Period (In millions) Total Less than 1 year 1-3 years 4-5 years After 5 years Debt, face value (c) $ 24,067.2 $ 889.7 $ 6,893.7 $ 4,445.0 $ 11,838.8 Capital lease obligations 35.9 15.4 20.5 — — Estimated interest payments (b) (c) 9,228.8 1,943.1 3,551.7 2,597.1 1,136.9 Operating lease obligations 1,624.7 71.2 123.7 109.5 1,320.3 Purchase order obligations 77.0 77.0 — — — Community reinvestment 74.7 6.5 12.8 12.9 42.5 Construction commitments 488.8 488.8 — — — Entertainment obligations (d) 206.7 60.9 63.1 38.7 44.0 Letters of credit 90.6 90.6 — — — Minimum payments to tribes (e) 74.1 13.8 25.8 24.0 10.5 Other contractual obligations 525.3 102.8 125.7 100.1 196.7 $ 36,493.8 $ 3,759.8 $ 10,817.0 $ 7,327.3 $ 14,589.7 (a) In addition to the contractual obligations disclosed in this table, we have unrecognized tax benefits that, based on uncertainties associated with the items and we are unable to make reasonably reliable estimates of the period of potential cash settlements, if any, with taxing authorities. (b) Estimated interest for variable-rate debt included in this table is based on rates at December 31, 2012 . Estimated interest includes the estimated impact of our interest rate swap and interest rate cap agreements. (c) Debt maturities and estimated interest assumes the extensions of the maturity of the CMBS Loans and the PHW Las Vegas senior secured loan from 2013 to 2015 , resulting in a net increase of interest of $402.9 million . Extensions of the CMBS Loans and the PHW Las Vegas senior secured loan is subject to certain conditions. (d) Entertainment obligations represent obligations to pay performers that have contracts for future performances at one or more of our properties. (e) The agreements pursuant to which we manage casinos on Indian lands contain provisions required by law that provide that a minimum monthly payment be made to the tribe. That obligation has priority over scheduled repayments of borrowings for development costs and over the management fee earned and paid to the manager. In the event that insufficient cash flow is generated by the operations to fund this payment, we must pay the shortfall to the tribe. Subject to certain limitations as to time, such advances, if any, would be repaid to us in future periods in which operations generate cash flow in excess of the required minimum payment. These commitments will terminate upon the occurrence of certain defined events, including termination of the management contract. Our aggregate monthly commitment for the minimum guaranteed payments pursuant to the contracts for the three managed Indian-owned facilities now open is $1.2 million per month. Each of these casinos currently generates sufficient cash flows to cover all of its obligations, including its debt service. • the estimates involve matters that are highly uncertain at the time the accounting estimate is made; and • different estimates or changes to estimates could have a material impact on the reported financial position, changes in financial position, or results of operations When more than one accounting principle, or method of its application, is generally accepted, we select the principle or method that we consider to be the most appropriate when given the specific circumstances. Application of these accounting principles requires us to make estimates about the future resolution of existing uncertainties. Estimates are typically based upon historical experience, current trends, contractual documentation, and other information, as appropriate. Due to the inherent uncertainty involving estimates, actual results reported in the future may differ from those estimates. In preparing our financial statements, we have made our best estimates and judgments of the amounts and disclosures included in the financial statements, giving regard to materiality. Long-Lived Assets We have significant capital invested in our long-lived assets and judgments are made in determining the estimated useful lives of assets, salvage values to be assigned to assets, and if or when an asset has been impaired. The accuracy of these estimates affects the amount of depreciation and amortization expense recognized in our financial results and whether we have a gain or loss on the disposal of an asset. We assign lives to our assets based on our standard policy, which is established by management as representative of the useful life of each category of asset. We review the carrying value of our long-lived assets whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. The factors considered by management in performing this assessment include current operating results, trends and prospects, as well as the effect of obsolescence, demand, competition, and other economic, legal, and regulatory factors. In estimating expected future cash flows for determining whether an asset is impaired, assets are grouped at the lowest level of identifiable cash flows, which, for most of our assets, is the individual property. Goodwill and Other Non-Amortizing Intangible Assets The purchase price of an acquisition is allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition. We determine the estimated fair values after review and consideration of relevant information including discounted cash flows, quoted market prices and estimates made by management. To the extent the purchase price exceeds the fair value of the net identifiable tangible and intangible assets acquired and liabilities assumed, such excess is recorded as goodwill. Each year, we perform a preliminary annual impairment assessment of goodwill as of September 30, or more frequently if impairment indicators exist. For our preliminary assessment, we determine the estimated fair value of each reporting unit as a function, or multiple, of earnings before interest, taxes, depreciation and amortization (“EBITDA”), combined with estimated future cash flows discounted at rates commensurate with the capital structure and cost of capital of comparable market participants, giving appropriate consideration to the prevailing borrowing rates within the casino industry in general. We also evaluate the aggregate fair value of all of our reporting units and other non-operating assets in comparison to our aggregate debt and equity market capitalization at September 30. Both EBITDA multiples and discounted cash flows are common measures used to value and buy or sell businesses in our industry. In the fourth quarter of each year, we finalize our assessment of goodwill once we complete our fair value analysis for reporting units where a step two impairment test is required. Each year, we perform an annual impairment assessment of other non-amortizing intangible assets as of September 30, or more frequently if impairment indicators exist. We determine the estimated fair value of our non-amortizing intangible assets by primarily using the Relief From Royalty Method and Excess Earnings Method under the income approach. We are permitted to perform a qualitative assessment of goodwill and other non-amortizing intangible assets to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step impairment test. We did not elect to perform a qualitative assessment of goodwill or other non-amortizing intangible assets in 2012. The annual evaluation of goodwill and other non-amortizing intangible assets requires the use of estimates about future operating results, valuation multiples, and discount rates to determine their estimated fair value. Changes in these assumptions can materially affect these estimates. Thus, to the extent the economy deteriorates further in the near future, discount rates increase significantly, or we do not meet our projected performance, we could have additional impairments to record in the next twelve months, and such impairments could be material. This is especially true for any of our properties where goodwill and other non-amortizing intangible assets have been partially impaired as a result of a recent impairment analysis, and for our Las Vegas properties, which comprise a significant portion of our remaining goodwill balance. Impairment charges related to goodwill and intangible assets other than goodwill are recorded to intangible and tangible asset impairment charges in the Consolidated Statements of Comprehensive Loss. 53 Total Rewards Point Liability Program Our customer loyalty program, Total Rewards, offers incentives to customers who gamble at a significant majority of our casinos throughout the United States. Under the program, customers are able to accumulate, or bank, reward credits over time that they may redeem at their discretion under the terms of the program. The reward credit balance will be forfeited if the customer does not earn a reward credit over the prior six-month period. As a result of the ability of the customer to bank the reward credits, we accrue the estimated cost of fulfilling the redemption of reward credits, after consideration of estimated forfeitures (referred to as “breakage”), as they are earned. The estimated value of reward credits is expensed as the reward credits are earned by customers and is included in direct casino expense in our Consolidated Statements of Comprehensive Loss. To arrive at the estimated cost associated with reward credits, estimates and assumptions are made regarding incremental marginal costs of the benefits, breakage rates, and the mix of goods and services for which reward credits will be redeemed. We use historical data to assist in the determination of estimated accruals. Allowance for Doubtful Accounts - Gaming We reserve an estimated amount for gaming receivables that may not be collected. Methodologies for estimating the allowance for doubtful accounts range from specific reserves to various percentages applied to aged receivables. Historical collection rates are considered, as are customer relationships, in determining specific reserves. As with many estimates, management must make judgments about potential actions by third parties in establishing and evaluating our reserves for allowance for doubtful accounts. Self-Insurance Accruals We are self-insured up to certain limits for costs associated with general liability, workers’ compensation, and employee health coverage. 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. In estimating these reserves, historical loss experience and judgments about the expected levels of costs per claim are considered. We also utilize consultants to assist in the determination of certain estimated accruals. These claims are accounted for based on actuarial estimates of the undiscounted claims, including those claims incurred but not yet reported. We believe the use of actuarial methods to account for these liabilities provides a consistent and effective way to measure these highly judgmental accruals; however, changes in health care costs, accident frequency and severity, and other factors can materially affect the estimates for these liabilities. We regularly monitor the potential for changes in estimates, evaluate our insurance accruals, and adjust our recorded provisions. Income Taxes We are subject to income taxes in the United States (including federal and state) and numerous foreign jurisdictions in which we operate. We record income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the expected future tax consequences of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and attributable to operating loss and tax credit carryforwards. We reduce the carrying amounts of deferred tax assets by a valuation allowance if, based on the available evidence, it is more likely than not that such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed periodically based on the “more likely than not” realization threshold. This assessment considers, among other matters, the nature, frequency, and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carryforward periods, our experience with operating loss and tax credit carryforwards not expiring unused, and tax planning alternatives. The effect on the income tax provision and deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. We have previously provided a valuation allowance on foreign tax credits, certain foreign and state net operating losses (“NOLs”), and other foreign and state deferred tax assets. Certain foreign and state NOLs and other foreign and state deferred tax assets were not deemed realizable because they are attributable to subsidiaries that are not expected to produce future earnings. We classify reserves for tax uncertainties within accrued expenses and deferred credits and other in our Consolidated Balance Sheets, separate from any related income tax payable, which is also reported within accrued expenses, or deferred income taxes. Reserve amounts relate to any potential income tax liabilities resulting from uncertain tax positions, as well as potential interest or penalties associated with those liabilities. We file income tax returns, including returns for our subsidiaries, with federal, state, and foreign jurisdictions. We are under regular and recurring audit by the Internal Revenue Service and various state taxing authorities on open tax positions, and it is possible that the amount of the liability for unrecognized tax benefits could change during the next 12 months. 54 Derivative Instruments Derivative instruments are recognized in the financial statements at fair value. Any changes in fair value are recorded in the Consolidated Statements of Comprehensive Loss or in accumulated other comprehensive loss (“AOCL”) within the equity section of the Consolidated Balance Sheets, depending upon whether the derivative is designated and qualifies for hedge accounting, the type of hedge transaction, and the effectiveness of the hedge. The estimated fair values of our derivative instruments are based on market prices obtained from dealer quotes. Such quotes represent the estimated amounts we would receive or pay to terminate the contracts. Our derivative instruments contain a credit risk that the counterparties may be unable to meet the terms of the agreements. We minimize that risk by evaluating the creditworthiness of our counterparties, which are limited to major banks and financial institutions. The fair values of our derivative instruments are adjusted for the credit rating of the counterparty if the derivative is an asset, or adjusted for the credit rating of the Company if the derivative is a liability. Recently Issued and Proposed Accounting Standards For discussions of the adoption and potential impacts of recently issued accounting standards, refer to Note 2 , “ Recently Issued Accounting Pronouncements ,” to our consolidated financial statements, included in Item 8 of this report. ITEM 7A. Quantitative and Qualitative Disclosure About Market Risk Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates and commodity prices. Our primary exposure to market risk is interest rate risk associated with our debt. We attempt to limit our exposure to interest rate risk by managing the mix of our debt between fixed-rate and variable-rate obligations. Of our $24,103.1 million face value of debt, including capital lease obligations, at December 31, 2012 , we have entered into interest rate swap agreements to fix the interest rate on $5,750.0 million of variable rate debt, and $6,137.0 million of debt remains subject to variable interest rates. We use interest rate swaps to manage the mix of our debt between fixed and variable rate instruments. As of December 31, 2012 , we have entered into eight interest rate swap agreements for notional amounts totaling $5,750.0 million . The difference to be paid or received under the terms of the interest rate swap agreements is accrued as interest rates change and recognized as an adjustment to interest expense for the related debt. Changes in the variable interest rates to be paid or received pursuant to the terms of the interest rate swap agreements will have a corresponding effect on future cash flows. In addition to the swap agreements, we have an interest rate cap agreement for a notional amount of $6,500.0 million at a LIBOR cap rate of 4.5% and an interest rate cap agreement for a notional amount of $517.7 million at a LIBOR cap rate of 7.0% . Assuming a constant outstanding balance for our variable rate debt for the next twelve months, a hypothetical 1% increase in interest rates would increase interest expense for the next twelve months by $45.5 million . At December 31, 2012 , the weighted average USD LIBOR rate on our variable rate debt was 0.217% . A hypothetical reduction of this rate to 0% would decrease interest expense for the next twelve months by $9.5 million . We do not purchase or hold any derivative financial instruments for trading purposes. 55 The table below provides information as of December 31, 2012 , about our financial instruments that are sensitive to changes in interest rates, including the cash flows associated with the principal amounts of debt obligations, the notional amounts of interest rate derivative instruments and related weighted average interest rates. Principal amounts are used to calculate the payments to be exchanged under the related agreement(s) and weighted average variable rates are based on implied forward rates in the yield curve as of December 31, 2012 . ____________________ As of December 31, 2012 and 2011 , our long-term variable rate debt reflects borrowings under our Credit Facilities provided to us by a consortium of banks with a total capacity of $6,480.6 million and $8,410.0 million , respectively. The interest rates charged on borrowings under these facilities are a function of LIBOR. As such, the interest rates charged to us for borrowings under the facilities are subject to change as LIBOR changes. Foreign currency transaction gains and losses were not material to our results of operations for the years ended December 31, 2012 , 2011 , and 2010 . Our only material ownership interests in businesses in foreign countries are London Clubs and an approximate 95% ownership of a casino in Uruguay. Therefore, we have not been subject to material foreign currency exchange rate risk from the effects that exchange rate movements of foreign currencies would have on our future operating results or cash flows. From time to time, we hold investments in various available-for-sale equity securities; however, our exposure to price risk arising from the ownership of these investments is not material to our consolidated financial position, results of operations, or cash flows. 56 Expected Maturity Date (Dollars in millions) 2013 2014 2015 2016 2017 Thereafter Total Fair Value Liabilities Long-term debt Fixed rate $ 895.2 $ 64.7 $ 1,609.1 $ 728.9 $ 2,244.5 $ 7,699.4 $ 13,241.8 $ 11,147.9 Average interest rate 9.3 % 9.3 % 9.9 % 10.0 % 9.9 % 7.4 % 9.6 % Variable rate (1) $ 9.9 $ 10.0 $ 5,230.4 $ 980.8 $ 490.8 $ 4,139.4 $ 10,861.3 $ 9,504.9 Average interest rate 5.0 % 5.4 % 6.0 % 6.3 % 5.6 % 5.1 % 5.7 % Interest Rate Derivatives Interest rate swaps Variable to fixed (2) $ 5,750.0 $ (306.4 ) Average pay rate 3.1 % 3.3 % 3.3 % — — — 3.2 % Average receive rate 0.2 % 0.3 % 0.4 % — — — 0.3 % Interest rate caps (3) $ 7,017.7 $ — (1) Maturities assume the extensions of the CMBS Loans and PHW Las Vegas senior secured loan from 2013 to 2015 . Extensions of the CMBS Loans and the PHW Las Vegas senior secured loan is subject to certain conditions. (2) Expire in 2015 . (3) Expire in 2013 . ITEM 8. Financial Statements and Supplementary Data REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Caesars Entertainment Corporation: We have audited the accompanying consolidated balance sheets of Caesars Entertainment Corporation and subsidiaries (the “Company”) as of December 31, 2012 and 2011 , and the related consolidated statements of comprehensive loss , stockholders' (deficit)/equity and cash flows for each of the three years in the period ended December 31, 2012 . Our audits also included the consolidated financial statement schedules included in Item 15(a)(2). These consolidated financial statements and consolidated financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on the consolidated financial statements and consolidated financial statement schedules based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Caesars Entertainment Corporation and subsidiaries as of December 31, 2012 and 2011 , and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2012 , in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such consolidated financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control over financial reporting as of December 31, 2012 , based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 15, 2013 , expressed an unqualified opinion on the Company's internal control over financial reporting. /s/ Deloitte & Touche LLP Las Vegas, Nevada March 15, 2013 57 CAESARS ENTERTAINMENT CORPORATION CONSOLIDATED BALANCE SHEETS (In millions, except par value) As of December 31, 2012 2011 Assets Current assets Cash and cash equivalents $ 1,757.5 $ 891.2 Restricted cash 833.6 66.6 Receivables, less allowance for doubtful accounts of $201.7 and $202.2 580.5 488.4 Deferred income taxes 114.9 170.5 Prepayments and other current assets 150.0 160.4 Inventories 52.0 44.6 Assets held for sale 5.1 15.5 Total current assets 3,493.6 1,837.2 Property and equipment, net of accumulated depreciation of $3,102.1 and $2,541.2 15,701.7 16,485.6 Goodwill 3,160.3 3,360.4 Intangible assets other than goodwill 3,985.7 4,363.2 Investments in and advances to non-consolidated affiliates 100.4 94.2 Restricted cash 364.6 451.1 Deferred charges and other 720.6 746.2 Assets held for sale 471.2 1,177.7 $ 27,998.1 $ 28,515.6 Liabilities and Stockholders’ Equity Current liabilities Accounts payable $ 376.2 $ 290.1 Interest payable 233.7 191.4 Accrued expenses 1,094.7 1,067.4 Current portion of long-term debt 879.9 40.4 Liabilities held for sale 3.8 13.5 Total current liabilities 2,588.3 1,602.8 Long-term debt 20,532.2 19,759.5 Deferred credits and other 823.0 901.7 Deferred income taxes 4,334.1 5,131.9 Liabilities held for sale 52.1 66.3 28,329.7 27,462.2 Commitments and contingencies Stockholders’ equity Common stock; voting; $0.01 par value; 127.5 and 125.4 shares issued, respectively 1.3 0.7 Treasury Stock: 2.1 and 0.3 shares, respectively (16.3 ) — Additional paid-in capital 6,954.4 6,885.1 Accumulated deficit (7,280.2 ) (5,782.7 ) Accumulated other comprehensive loss (70.9 ) (96.4 ) Total Caesars stockholders’(deficit)/ equity (411.7 ) 1,006.7 Non-controlling interests 80.1 46.7 Total (deficit)/equity (331.6 ) 1,053.4 $ 27,998.1 $ 28,515.6 See accompanying Notes to Consolidated Financial Statements. 58 CAESARS ENTERTAINMENT CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (In millions, except per share data) Year Ended December 31, 2012 2011 2010 Revenues Casino $ 6,246.9 $ 6,394.5 $ 6,671.8 Food and beverage 1,510.1 1,508.4 1,482.1 Rooms 1,205.5 1,193.1 1,117.7 Management fees 47.3 35.8 39.1 Other 829.4 674.1 568.8 Less: casino promotional allowances (1,252.5 ) (1,232.6 ) (1,326.3 ) Net revenues 8,586.7 8,573.3 8,553.2 Operating expenses Direct Casino 3,556.0 3,618.1 3,817.7 Food and beverage 660.1 659.4 614.3 Rooms 297.6 286.2 258.5 Property, general, administrative, and other 2,103.8 2,086.9 2,029.7 Depreciation and amortization 715.5 678.1 699.4 Write-downs, reserves, and project opening costs, net of recoveries 106.2 73.8 149.7 Intangible and tangible asset impairment charges 1,067.7 32.8 184.0 Loss on interests in non-consolidated affiliates 17.5 7.9 1.5 Corporate expense 195.0 152.8 140.9 Acquisition and integration costs 6.1 4.3 13.6 Amortization of intangible assets 174.6 156.7 160.8 Total operating expenses 8,900.1 7,757.0 8,070.1 (Loss)/income from operations (313.4 ) 816.3 483.1 Interest expense, net of interest capitalized (2,101.3 ) (2,122.3 ) (1,981.6 ) Gains on early extinguishments of debt 136.0 47.9 115.6 Other income, including interest income 25.5 25.3 41.0 Loss from continuing operations before income taxes (2,253.2 ) (1,232.8 ) (1,341.9 ) Benefit for income taxes 870.5 534.7 492.5 Loss from continuing operations, net of income taxes (1,382.7 ) (698.1 ) (849.4 ) Discontinued operations (Loss)/income from discontinued operations (59.4 ) 59.2 49.9 Provision for income taxes (50.1 ) (27.8 ) (23.8 ) (Loss)/income from discontinued operations, net of income taxes (109.5 ) 31.4 26.1 Net loss (1,492.2 ) (666.7 ) (823.3 ) Less: net income attributable to non-controlling interests (5.3 ) (20.9 ) (7.8 ) Net loss attributable to Caesars (1,497.5 ) (687.6 ) (831.1 ) Other comprehensive income/(loss), net of income taxes: Defined benefit plan adjustments (10.9 ) (39.5 ) (6.1 ) Foreign currency translation adjustments 19.9 (0.8 ) 4.0 Change in fair market value of derivatives — (35.9 ) (60.7 ) Reclassification of loss on derivative instruments from other comprehensive loss to interest expense 18.1 148.4 22.2 Unrealized losses/(gains) on investments (0.5 ) 1.5 1.6 Total other comprehensive income/(loss), net of income taxes 26.6 73.7 (39.0 ) Comprehensive loss (1,470.9 ) (613.9 ) (870.1 ) Less: foreign currency translation adjustments attributable to non-controlling interests, net of income taxes (1.1 ) (1.3 ) 4.2 Comprehensive loss attributable to Caesars $ (1,472.0 ) $ (615.2 ) $ (865.9 ) See accompanying Notes to Consolidated Financial Statements. 59 Loss per share - basic and diluted Loss per share from continuing operations $ (11.08 ) $ (5.75 ) $ (8.63 ) (Loss)/earnings per share from discontinued operations (0.87 ) 0.25 0.26 Net loss per share $ (11.95 ) $ (5.50 ) $ (8.37 ) Weighted-average common shares outstanding - basic and diluted 125.3 125.1 99.3 CAESARS ENTERTAINMENT CORPORATION CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY/(DEFICIT) (In millions) ____________________ * Amount rounds to zero. See accompanying Notes to Consolidated Financial Statements. 60 Caesars Stockholders Additional Paid-in- Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Caesars Stockholders' Equity Non-Controlling Interests Total Equity Common Stock Treasury Stock Balance at December 31, 2009 $ 0.4 $ — $ 3,480.0 $ (4,269.3 ) $ (134.0 ) $ (922.9 ) $ 55.9 $ (867.0 ) Net (loss)/income — — — (831.1 ) — (831.1 ) 7.8 (823.3 ) Share-based compensation — — 17.9 — — 17.9 0.2 18.1 Repurchase of treasury shares * — (1.6 ) — — (1.6 ) — (1.6 ) Cumulative preferred stock dividends — — (64.6 ) — — (64.6 ) — (64.6 ) Cancellation of cumulative preferred stock dividends in connection with conversion of preferred stock to common stock — — 717.2 — — 717.2 — 717.2 Conversion of non-voting perpetual preferred stock to non-voting common stock 0.2 — 1,989.6 — — 1,989.8 — 1,989.8 Private placement 0.1 — 768.0 — — 768.1 — 768.1 Distributions to non-controlling interests, net of contributions — — — — — — (10.1 ) (10.1 ) Effect of deconsolidation of variable interest entities — — — (5.2 ) — (5.2 ) (9.8 ) (15.0 ) Other comprehensive loss, net of tax — — — — (34.8 ) (34.8 ) (4.2 ) (39.0 ) Balance at December 31, 2010 0.7 — 6,906.5 (5,105.6 ) (168.8 ) 1,632.8 39.8 1,672.6 Effect of change in accounting for accruals for casino jackpot liabilities, net of tax — — — 10.7 — 10.7 — 10.7 Net (loss)/income — — — (687.6 ) — (687.6 ) 20.9 (666.7 ) Share-based compensation — — 22.1 — — 22.1 0.1 22.2 Repurchase of treasury shares * — (1.7 ) — — (1.7 ) — (1.7 ) Distributions to non-controlling interests, net of contributions — — — — — — (5.8 ) (5.8 ) Changes in non-controlling interests — — — — — — (9.6 ) (9.6 ) Purchase of additional interest in subsidiary — — (31.5 ) — — (31.5 ) — (31.5 ) Other comprehensive income, net of tax — — — — 72.4 72.4 1.3 73.7 Other — — (10.3 ) (0.2 ) — (10.5 ) — (10.5 ) Balance at December 31, 2011 0.7 — 6,885.1 (5,782.7 ) (96.4 ) 1,006.7 46.7 1,053.4 Net (loss)/income — — — (1,497.5 ) — (1,497.5 ) 5.3 (1,492.2 ) Share-based compensation — — 34.1 — — 34.1 — 34.1 Initial public offering: 0.6 — 16.6 — — 17.2 — 17.2 Common stock issuances * — 0.2 — — 0.2 — 0.2 Increase in treasury shares — (16.3 ) 16.3 — — — — — Increase in non-controlling interests, net of distributions and contributions — — — — — — 27.0 27.0 Other comprehensive income, net of tax — — — — 25.5 25.5 1.1 26.6 Other — — 2.1 — — 2.1 — 2.1 Balance at December 31, 2012 $ 1.3 $ (16.3 ) $ 6,954.4 $ (7,280.2 ) $ (70.9 ) $ (411.7 ) $ 80.1 $ (331.6 ) CAESARS ENTERTAINMENT CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Year Ended December 31, 2012 2011 2010 Cash flows from operating activities Net loss $ (1,492.2 ) $ (666.7 ) $ (823.3 ) Adjustments to reconcile net loss to cash flows provided by operating activities: Loss/(income) from discontinued operations 109.5 (31.4 ) (26.1 ) Gains on early extinguishments of debt (136.0 ) (47.9 ) (115.6 ) Depreciation and amortization 903.1 847.0 871.7 Amortization of deferred finance costs and debt discount/premium 314.8 227.5 240.1 Reclassification from, and amortization of, accumulated other comprehensive loss 28.4 266.5 36.3 Non-cash write-downs and reserves, net of recoveries 41.4 5.3 108.1 Impairment of intangible and tangible assets 1,067.7 32.8 184.0 Share-based compensation expense 55.1 22.2 18.1 Deferred income taxes (750.4 ) (501.3 ) (465.7 ) Federal income tax refund received — — 220.8 Change in deferred charges and other 23.5 51.9 58.5 Change in deferred credits and other (118.9 ) (123.6 ) (70.2 ) Change in current assets and liabilities: Accounts receivable (88.0 ) (87.1 ) (59.6 ) Prepayments and other current assets (15.4 ) 43.2 (18.4 ) Accounts payable 37.8 14.9 (16.9 ) Interest payable 42.6 (10.1 ) 4.9 Accrued expenses 9.4 15.5 (58.8 ) Other (5.9 ) 1.6 16.5 Cash flows provided by operating activities 26.5 60.3 104.4 Cash flows from investing activities Acquisitions of property and equipment, net of change in related payables (507.7 ) (272.5 ) (151.3 ) Change in restricted cash (680.5 ) (517.7 ) — Purchase of additional interest in subsidiary — (75.4 ) (19.5 ) Payments to acquire certain gaming rights — (22.7 ) (16.5 ) Payments to acquire businesses, net of transaction costs and cash acquired (37.9 ) (19.0 ) (30.6 ) Investments in/advances to non-consolidated affiliates and other (28.1 ) (76.0 ) (64.0 ) Proceeds from the sale of a subsidiary 42.4 — — Purchases of investment securities (39.2 ) (35.7 ) (25.8 ) Proceeds from the sale and maturity of investment securities 31.6 22.6 14.8 Other (5.5 ) (9.9 ) 14.4 Cash flows used in investing activities (1,224.9 ) (1,006.3 ) (278.5 ) Cash flows from financing activities Proceeds from the issuance of long-term debt 3,709.4 863.8 1,332.2 Debt issuance costs and fees (50.6 ) (18.1 ) (64.6 ) Borrowings under lending agreements 453.0 358.0 1,175.0 Repayments under lending agreements (608.0 ) (203.0 ) (1,625.8 ) Cash paid for early extinguishments of debt (2,036.6 ) (128.5 ) (369.1 ) Scheduled debt retirements (15.8 ) (43.7 ) (237.0 ) Purchase of additional interests in subsidiary (9.6 ) — — Proceeds from sale of additional interest in a subsidiary 32.2 — — Issuance of common stock, net of fees 17.4 — — Other (18.8 ) (17.0 ) (23.3 ) Cash flows provided by financing activities 1,472.6 811.5 187.4 See accompanying Notes to Consolidated Financial Statements. 61 Cash flows from discontinued operations Cash flows from operating activities (16.9 ) 62.8 66.4 Cash flows from investing activities 600.3 (10.7 ) (9.4 ) Cash flows from financing activities — — — Net cash provided by discontinued operations 583.4 52.1 57.0 Net increase/(decrease) in cash and cash equivalents 857.6 (82.4 ) 70.3 Effect of deconsolidation of variable interest entities — — (1.4 ) Change in cash classified as assets held for sale 8.7 2.5 0.1 Cash and cash equivalents, beginning of period 891.2 971.1 902.1 Cash and cash equivalents, end of period $ 1,757.5 $ 891.2 $ 971.1 CAESARS ENTERTAINMENT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS In these footnotes, the words “Company,” “Caesars Entertainment,” “we,” “our,” and “us” refer to Caesars Entertainment Corporation, a Delaware corporation, and its subsidiaries, unless otherwise stated or the context requires otherwise. Note 1 — Summary of Significant Accounting Policies Organization and Description of Business Our business is primarily conducted through a wholly-owned subsidiary, Caesars Entertainment Operating Company, Inc. ("CEOC"), although certain material properties are not owned by CEOC. As of December 31, 2012 , we owned, operated, or managed, through various subsidiaries, 52 casinos in 13 U.S. states and seven countries. The majority of these casinos operate in the United States, primarily under the Caesars, Harrah’s, and Horseshoe brand names, and in England. Our casino entertainment facilities include 33 land-based casinos, 11 riverboat or dockside casinos, three managed casinos on Indian lands in the United States, one managed casino in Cleveland, Ohio, one managed casino in Canada, one casino combined with a greyhound racetrack, one casino combined with a thoroughbred racetrack, and one casino combined with a harness racetrack. Our land-based casinos include nine in England, two in Egypt, one in Scotland, one in South Africa and one in Uruguay. In addition, through Caesars Interactive Entertainment, Inc. ("CIE"), a majority-owned subsidiary, we own an online gaming business, providing for real money casino, bingo, and poker games in the United Kingdom, alliances with online gaming providers in Italy and France, "play for fun" offerings in other jurisdictions, social games on Facebook and other social media websites, and mobile application platforms. Also through CIE, we own the World Series of Poker tournament and brand. We view each casino property and CIE as operating segments and aggregate all such casino properties and CIE into one reportable segment. On January 28, 2008 , Caesars Entertainment was acquired by affiliates of Apollo Global Management, LLC (together with such affiliates, “Apollo”) and affiliates of TPG Capital, LP (together with such affiliates, “TPG” and, together with Apollo, the “Sponsors”) in an all-cash transaction ("the Acquisition"). As a result of the Acquisition and through February 7, 2012 , our stock was not publicly traded. Effective February 8, 2012 , as the result of our public offering, our common stock trades on the NASDAQ Global Select Market ("NASDAQ") under the symbol “ CZR .” In connection with the public offering, the Company effected a 1.742 -for- one split of its common stock. Unless otherwise stated, all applicable share and per-share data presented herein have been retroactively adjusted to give effect to this stock split. See Note 10 , “ Stockholders' Equity, Non-controlling Interests and Loss Per Share ,” for further information. Basis of Presentation Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States ("GAAP"), which require the use of estimates and assumptions that affect the reported amounts of assets, liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the amounts of revenues and expenses during the reporting periods. Management believes the accounting estimates are appropriate and reasonably stated; however, due to the inherent uncertainties in making these estimates, actual amounts could differ. Principles of Consolidation Our consolidated financial statements include the accounts of Caesars Entertainment and its subsidiaries after elimination of all intercompany accounts and transactions. We consolidate into our financial statements the accounts of all wholly-owned subsidiaries and any partially-owned subsidiary that we have the ability to control. Control generally equates to ownership percentage, whereby investments that are more than 50% owned are consolidated, investments in affiliates of 50% or less but greater than 20% are generally accounted for using the equity method, and investments in affiliates of 20% or less are generally accounted for using the cost method. We also consolidate into our financial statements the accounts of any variable interest entity for which we are determined to be the primary beneficiary. Up through and including December 31, 2012 , we analyzed our variable interests to determine if the entity that is party to the variable interest is a variable interest entity in accordance with GAAP. Our analysis included both quantitative and qualitative reviews. Qualitative analysis is based on our review of the design of the entity, its organizational structure including decision-making ability, and financial agreements. Based on these analyses, there were no consolidated variable interest entities that were material to our consolidated financial statements. 62 Cash and Cash Equivalents Cash equivalents are highly liquid investments with maturities of less than three months from the date of purchase and are stated at the lower of cost or market value. Restricted Cash Proceeds from bond offerings that are in escrow prior to closing, and cash reserved under loan agreements for (a) development projects and (b) certain expenditures incurred in the normal course of business, such as interest services, real estate taxes, casualty insurance, and capital improvements, are classified as restricted cash in our Consolidated Balance Sheets. Allowance for Doubtful Accounts - Gaming We reserve an estimated amount for gaming receivables that may not be collected. Methodologies for estimating the allowance for doubtful accounts range from specific reserves to various percentages applied to aged receivables. Historical collection rates are considered, as are customer relationships, in determining specific reserves. Casino Reinvestment Development Authority Investment Obligations The New Jersey Casino Control Act provides, among other things, for an assessment of licenses equal to 1.25% of gross gaming revenues in lieu of an investment alternative tax equal to 2.5% of gross gaming revenues. The Company may satisfy this investment obligation by investing in qualified eligible direct investments, by making qualified contributions, or by depositing funds with the Casino Reinvestment Development Authority ("CRDA"). Funds deposited with the CRDA may be used to purchase bonds designated by the CRDA or, under certain circumstances, may be donated to the CRDA in exchange for credits against future CRDA investment obligations. Upon initial obligation deposits made by the Company, an allowance is made to record the deposit at its expected eventual realizable value. Inventories Inventories, which consist primarily of food, beverage, retail merchandise, and operating supplies, are stated at average cost. Long-Lived Assets We have significant capital invested in our long-lived assets and judgments are made in determining the estimated useful lives of assets, salvage values to be assigned to assets, and if or when an asset has been impaired. The accuracy of these estimates affects the amount of depreciation and amortization expense recognized in our financial results and whether we have a gain or loss on the disposal of an asset. We assign lives to our assets based on our standard policy, which is established by management as representative of the useful life of each category of asset. We review the carrying value of our long-lived assets whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. The factors considered by management in performing this assessment include current operating results, trends and prospects, as well as the effect of obsolescence, demand, competition, and other economic, legal, and regulatory factors. In estimating expected future cash flows for determining whether an asset is impaired, assets are grouped at the lowest level of identifiable cash flows, which, for most of our assets, is the individual property. Additions to property and equipment are stated at cost. We capitalize the costs of improvements that extend the life of the asset. We expense maintenance and repair costs as incurred. Gains or losses on the dispositions of property and equipment are included in the determination of income. Interest expense is capitalized on internally constructed assets at the applicable weighted-average borrowing rates of interest. Depreciation is calculated using the straight-line method over the shorter of the estimated useful life of the asset or the related lease as follows: 63 Land improvements 12 years Buildings 30 to 40 years Leasehold improvements 5 to 15 years Riverboats and barges 30 years Furniture, fixtures, and equipment 2 1/2 to 20 years Goodwill and Other Non-Amortizing Intangible Assets The purchase price of an acquisition is allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition. We determine the estimated fair values after review and consideration of relevant information including discounted cash flows, quoted market prices, and estimates made by management. To the extent the purchase price exceeds the fair value of the net identifiable tangible and intangible assets acquired and liabilities assumed, such excess is recorded as goodwill. Each year, we perform a preliminary annual impairment assessment of goodwill as of September 30 , or more frequently if impairment indicators exist. For our preliminary assessment, we determine the estimated fair value of each reporting unit as a function, or multiple, of earnings before interest, taxes, depreciation and amortization (“EBITDA”), combined with estimated future cash flows discounted at rates commensurate with the capital structure and cost of capital of comparable market participants, giving appropriate consideration to the prevailing borrowing rates within the casino industry in general. We also evaluate the aggregate fair value of all of our reporting units and other non-operating assets in comparison to our aggregate debt and equity market capitalization at September 30 . Both EBITDA multiples and discounted cash flows are common measures used to value and buy or sell businesses in our industry. In the fourth quarter of each year, we finalize our assessment of goodwill once we complete our fair value analysis for reporting units where a step two impairment test is required. Each year, we perform an annual impairment assessment of other non-amortizing intangible assets as of September 30 , or more frequently if impairment indicators exist. We determine the estimated fair value of our non-amortizing intangible assets by primarily using the Relief From Royalty Method and Excess Earnings Method under the income approach. We are permitted to perform a qualitative assessment of goodwill and other non-amortizing intangible assets to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step impairment test. We did not elect to perform a qualitative assessment of goodwill or other non-amortizing intangible assets in 2012. The annual evaluation of goodwill and other non-amortizing intangible assets requires the use of estimates about future operating results, valuation multiples, and discount rates to determine their estimated fair value. Changes in these assumptions can materially affect these estimates. Thus, to the extent the economy deteriorates further in the near future, discount rates increase significantly, or we do not meet our projected performance, we could have additional impairments to record in the next twelve months and such impairments could be material. This is especially true for any of our properties where goodwill and other non-amortizing intangible assets have been partially impaired as a result of a recent impairment analysis, and for our Las Vegas properties, which comprise a significant portion of our remaining goodwill balance. Impairment charges related to goodwill and intangible assets other than goodwill are recorded to intangible and tangible asset impairment charges in the Consolidated Statements of Comprehensive Loss. Debt Discounts or Premiums and Unamortized Debt Issue Costs Debt discounts or premiums and debt issue costs 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 or premiums are written off and included in our gain or loss calculations to the extent we retire debt prior to its original maturity date. Unamortized debt issue costs are included in deferred charges and other in our Consolidated Balance Sheets. Derivative Instruments Derivative instruments are recognized in the financial statements at fair value. Any changes in fair value are recorded in the Consolidated Statements of Comprehensive Loss or in accumulated other comprehensive loss (“AOCL”) within the equity section of the Consolidated Balance Sheets, depending upon whether the derivative is designated and qualifies for hedge accounting, the type of hedge transaction, and the effectiveness of the hedge. The estimated fair values of our derivative instruments are based on market prices obtained from dealer quotes. Such quotes represent the estimated amounts we would receive or pay to terminate the contracts. Our derivative instruments contain a credit risk that the counterparties may be unable to meet the terms of the agreements. We minimize that risk by evaluating the creditworthiness of our counterparties, which are limited to major banks and financial institutions. The fair values of our derivative instruments are adjusted for the credit rating of the counterparty if the derivative is an asset, or adjusted for the credit rating of the Company if the derivative is a liability. 64 Total Rewards Point Liability Program Our customer loyalty program, Total Rewards, offers incentives to customers who gamble at certain of our casinos throughout the United States. Under the program, customers are able to accumulate, or bank, reward credits over time that they may redeem at their discretion under the terms of the program. The reward credit balance will be forfeited if the customer does not earn a reward credit over the prior six-month period. As a result of the ability of the customer to bank the reward credits, we accrue the estimated cost of fulfilling the redemption of reward credits, after consideration of estimated forfeitures (referred to as “breakage”), as they are earned. The estimated value of reward credits is expensed as the reward credits are earned by customers and is included in direct casino expense in our Consolidated Statements of Comprehensive Loss. To arrive at the estimated cost associated with reward credits, estimates and assumptions are made regarding incremental marginal costs of the benefits, breakage rates, and the mix of goods and services for which reward credits will be redeemed. We use historical data to assist in the determination of estimated accruals. Such amounts are included within accrued expenses in the Consolidated Balance Sheets presented herein, see Note 7 " Detail of Accrued Expenses ." In addition to reward credits, customers at certain of our properties can earn points based on play that are redeemable in the form of credits playable at the gaming machine. We accrue the cost of redeemable points, after consideration of estimated breakage, as they are earned. The cost is recorded as contra-revenue and included in casino promotional allowances in our Consolidated Statements of Comprehensive Loss. Self-Insurance Accruals We are self-insured up to certain limits for costs associated with general liability, workers’ compensation, and employee health coverage. 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. In estimating these reserves, historical loss experience and judgments about the expected levels of costs per claim are considered. These claims are accounted for based on actuarial estimates of the undiscounted claims, including those claims incurred but not reported. We believe the use of actuarial methods to account for these liabilities provides a consistent and effective way to measure these highly judgmental accruals. We regularly monitor the potential for changes in estimates, evaluate our insurance accruals, and adjust our recorded provisions. Revenue Recognition Casino revenues are measured by the aggregate net difference between gaming wins and losses, with liabilities recognized for funds deposited by customers before gaming play occurs and for chips in the customers’ possession. Food and beverage, rooms, and other operating revenues are recognized when services are performed. Advance deposits on rooms and advance ticket sales are recorded as customer deposits until services are provided to the customer. The Company does not recognize as revenue taxes collected on goods or services sold to its customers. The retail value of accommodations, food and beverage, and other services furnished to guests without charge is included in gross revenues and then deducted as promotional allowances. The estimated cost of providing such promotional allowances is included in casino expenses as follows: Advertising The Company expenses the production costs of advertising the first time the advertising takes place. Advertising expense was $194.2 million , $190.1 million , and $195.5 million for the years ended December 31, 2012 , 2011 , and 2010 , respectively. 65 Year Ended December 31, (In millions) 2012 2011 2010 Total Food and Beverage Expense $ 477.1 $ 469.4 $ 475.6 Room Expense 186.7 188.1 187.6 Property general, admin and other 49.7 59.0 59.2 $ 713.5 $ 716.5 $ 722.4 Income Taxes We are subject to income taxes in the United States (including federal and state) and numerous foreign jurisdictions in which we operate. We record income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the expected future tax consequences of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and attributable to operating loss and tax credit carryforwards. We reduce the carrying amounts of deferred tax assets by a valuation allowance if, based on the available evidence, it is more likely than not that such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed periodically based on the more likely than not realization threshold. This assessment considers, among other matters, the nature, frequency, and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carryforward periods, our experience with operating loss and tax credit carryforwards not expiring unused, and tax planning alternatives. The effect on the income tax provision and deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. We have previously provided a valuation allowance on foreign tax credits, certain foreign and state net operating losses (“NOLs”), and other foreign and state deferred tax assets. Certain foreign and state NOLs and other foreign and state deferred tax assets were not deemed realizable because they are attributable to subsidiaries that are not expected to produce future earnings. We classify reserves for tax uncertainties within accrued expenses and deferred credits and other in our Consolidated Balance Sheets, separate from any related income tax payable, which is also reported within accrued expenses, or deferred income taxes. Reserve amounts relate to any potential income tax liabilities resulting from uncertain tax positions, as well as potential interest or penalties associated with those liabilities. We file income tax returns, including returns for our subsidiaries, with federal, state, and foreign jurisdictions. We are under regular and recurring audit by the Internal Revenue Service (“IRS”) and various state taxing authorities on open tax positions, and it is possible that the amount of the liability for unrecognized tax benefits could change during the next 12 months. Reclassifications We have revised certain amounts for prior periods to conform to our 2012 presentation. Note 2 — Recently Issued Accounting Pronouncements In December 2011 , the Financial Accounting Standards Board (“FASB”) issued updated guidance related to disclosures about offsetting assets and liabilities. The new guidance contains disclosure requirements regarding the nature of an entity’s rights of offset and related arrangements associated with its financial instruments and derivative instruments. The new disclosures are designed to make financial statements that are prepared under GAAP more comparable to those prepared under IFRS. To facilitate comparison between financial statements prepared under GAAP and IFRS, the new disclosures give financial statement users information about both gross and net exposures. The new disclosure requirements will be effective for us January 1, 2013 . As this is a disclosure requirement only, there will be no impact on our consolidated financial position, results of operations, or cash flows upon adoption. Effective January 1, 2012 , we adopted the updated guidance related to fair value measurement and disclosure requirements. The changes result in common fair value measurement and disclosure requirements between GAAP and International Financial Reporting Standards and change the wording used to describe many of the requirements in GAAP for measuring fair value and for disclosing information about fair value measurements. The new disclosure requirements have been included in this Form 10-K , and, as this update relates only to disclosures, there was no impact on our consolidated financial position, results of operations, or cash flows upon adoption. Effective January 1, 2012 , we adopted the new guidance for the presentation of comprehensive income. The new guidance requires that all non-owner changes in stockholders' equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The new disclosure requirements have been included in this Form 10-K , and, as this update relates only to presentation and disclosures, there was no impact on our consolidated financial position, results of operations, or cash flows upon adoption. 66 Effective January 1, 2012 , we adopted the revised guidance for goodwill impairment testing. The new guidance allows an entity to perform a qualitative assessment on goodwill to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two -step goodwill impairment test. In July 2012 , the guidance was amended to include assessments for indefinite-lived intangible assets. The Company adopted the amended guidance in the second quarter of 2012 as permitted under the amendment which resulted in impairments as further described in Note 6 , " Goodwill and Other Intangible Assets ." We did not elect to perform a qualitative assessment of goodwill in 2012. Note 3 — Acquisitions, Investments, Dispositions and Divestitures Acquisitions and Investments Venture with Rock Gaming, LLC In December 2010 , we formed a venture, Rock Ohio Caesars LLC ("ROC"), with Rock Ohio Ventures, LLC (formerly Rock Gaming, LLC) (“Rock Gaming”), to pursue casino developments in Cincinnati and Cleveland. Pursuant to the agreements forming the venture, we have committed to invest up to $200.0 million for an approximate 30% interest in the venture. The casino developments will be managed by subsidiaries of CEOC. In August 2011 , Rock Gaming exercised a contractual right to buy down a portion of our interest in the venture. Pursuant to this right, Rock Gaming contributed capital to the venture disproportionately with its existing ownership interest, lowering our ownership interest in the venture to 20.0% . During 2011 , the Company contributed an additional $16.0 million into its venture with Rock Gaming, bringing its total cash contribution to the venture to $80.0 million . This contribution is included in “Investments in and advances to nonconsolidated affiliates” in our Consolidated Balance Sheets. In August 2012 , Caesars Ohio Investment, LLC (“COI”) sold a 53.39% interest in Thistledown Racetrack, LLC (“Thistledown”), a thoroughbred racing facility in Cleveland, Ohio, to Rock Gaming for $28.6 million . Effectively concurrent with this sale, COI contributed its remaining 46.61% interest in Thistledown to ROC in exchange for additional equity interests in ROC. Immediately subsequent to these transactions, Rock Gaming purchased a portion of equity interests in ROC from COI for $14.3 million in order to retain an 80% ownership interest in ROC. The Company recognized an $11.0 million gain on these transactions. Baltimore, Maryland In September 2011 , we filed an application with the State of Maryland for the license to operate a video lottery terminal ("VLT") facility in the City of Baltimore. The application was filed on behalf of a consortium that, at the time, included Caesars Entertainment as the lead investor and facility manager, Rock Gaming, CVPR Gaming Holdings, LLC, and The Stronach Group (the "Baltimore Investors"). The consideration paid to the State of Maryland along with the bid for the license has been recorded as a non-amortizing intangible asset. In July 2012 , the consortium led by the Company was awarded the license to operate a casino in downtown Baltimore. In October 2012 , Caesars entered into definitive agreements with the Baltimore Investors and Brown Capital Management to form a venture that will build and own the casino, subject to regulatory approvals and receipt of project financing. Pursuant to such definitive agreements, we committed to contribute a maximum of $78.0 million in capital to the venture, $17.7 million of which has previously been contributed, for the purpose of developing and constructing the casino. At December 31, 2012, Caesars had an approximately 52% indirect ownership interest in the venture, which was consolidated as a variable interest entity into our financial statements. Windsor Casino Limited In June 2012 , Windsor Casino Limited ("WCL") redeemed and canceled all of the WCL shares held by HPP International Corporation (a Hilton affiliate), an unrelated third party, representing 50% of WCL's equity, for $8.7 million . The redemption of the shares increased Caesars' ownership interest to 100% . The results of WCL for the periods subsequent to the transaction are consolidated into our financial statements. Prior to June 2012 , we had a 50% ownership interest in WCL that was accounted for under the equity method. We operate Caesars Windsor located in Windsor, Ontario, and the province of Ontario owns the complex through the Ontario Lottery and Gaming Commission. 67 Chester Downs In January 2012 , we received notice that the minority owners of Chester Downs and Marina, LLC ("Chester Downs") elected to exercise their put rights thereby requiring us to purchase from the minority owners 90% of their interest in Chester Downs for consideration of $9.6 million . We consummated this purchase in February 2012 . As a result, we now have a 99.5% ownership interest in this property. Playtika Ltd. In May 2011 , Caesars Interactive Entertainment Israel, Ltd. (“CIEI”), a subsidiary of CIE, which is a majority-owned subsidiary of Caesars Entertainment, acquired 51% of the voting equity interests of Playtika, a social games developer based in Israel. For periods subsequent to the date of acquisition, Playtika is consolidated into our financial statements. The purchase price of Playtika was allocated based upon estimated fair values of the assets acquired and liabilities assumed, with the excess of estimated fair value over net tangible and intangible assets acquired recorded as goodwill. The purchase price allocation includes assets and liabilities of Playtika as follows: The Company finalized the purchase price allocations during fourth quarter 2011 . CIEI purchased the remaining 49% of Playtika in December 2011 bringing CIEI’s ownership of Playtika to 100% . The non-controlling interest acquired was adjusted to its acquisition-date fair value by recording a reduction to equity of $31.5 million . There was no gain or loss recognized as a result of remeasuring the redeemable non-controlling interests to its acquisition-date fair value. Buffalo Studios, LLC and Bubbler Media In December 2012 , CIE purchased substantially all of the net assets of Buffalo Studios, LLC ("Buffalo"), a social and mobile games developer and owner of Bingo Blitz, for consideration of approximately $45.9 million , including the current estimate of contingent consideration. In September 2012 , CIE purchased the assets of Bubbler Media ("Bubbler") a social and mobile games developer based in Belarus, for consideration of approximately $7.5 million . The purchase prices of Buffalo and Bubbler were allocated based on estimated fair values of the assets acquired and liabilities assumed, with the excess of the purchase price over the estimated fair value of the net tangible and intangible assets acquired recorded as goodwill. The preliminary purchase price allocations include total assets, liabilities and net assets acquired of Buffalo of $48.1 million , $2.2 million and $45.9 million , respectively. The preliminary purchase price allocations include net assets acquired of Bubbler of $7.5 million . The Company has not yet finalized its purchase price allocations for either of these transactions. The most significant of the items not finalized is the determination of contingent consideration incurred in connection with the Buffalo acquisition, and deferred tax balances associated with differences between the estimated fair values and the tax bases of assets acquired and liabilities assumed for both transactions. Suffolk Downs In March 2011 , we acquired an interest in Sterling Suffolk Racecourse, LLC ("Suffolk Downs"), which owns a horse-racing track in Massachusetts, along with an option to purchase additional interests and the right to manage a potential future gaming facility. The consideration paid for this investment has been recorded as an amortizing intangible asset, representing the right to manage a potential future gaming facility, with amortization commencing upon the future opening date of such facility. 68 (In millions) May 16, 2011 Assets Total current assets $ 6.5 Goodwill 50.7 Intangible assets other than goodwill 25.0 82.2 Liabilities Total current liabilities (5.9 ) Total long term liabilities (5.3 ) Redeemable non-controlling interests (36.0 ) Net assets acquired $ 35.0 During 2012 , the Company acquired a $28.1 million preferred equity interest in Suffolk Downs. This investment has been recorded as an investment in non-consolidated affiliates and is accounted for using the equity method of accounting. Dispositions and Divestitures Harrah's St. Louis In May 2012 , the Company, along with certain of its wholly-owned subsidiaries, entered into an equity interest purchase agreement with Penn National Gaming, Inc. (“Penn”) whereby the Company agreed to sell its Harrah's St. Louis casino to Penn for a purchase price of $610.0 million . The sale closed on November 2, 2012 and the Company recorded a pre-tax gain of $9.3 million on the sale. The Company has been using and continues to expect to use the net proceeds from the sale to fund capital expenditures of CEOC. All assets and liabilities sold pursuant to the purchase agreement have been classified as held for sale in our Consolidated Balance Sheets at December 31, 2011 , and we have presented the operations of the Harrah's St. Louis casino as discontinued operations in our Consolidated Statements of Comprehensive Loss for the years ended December 31, 2012 , 2011 , and 2010 . See “Discontinued Operations” below. Macau Land Concession During the second quarter of 2012 , we determined that it is more likely than not that we will divest of our investment in subsidiaries that hold a land concession in Macau prior to the end of the remaining 35 -year term of the concession. As a result, we performed an impairment assessment on the land concession and recorded an impairment charge of $101.0 million . In the fourth quarter of 2012 , the Company began discussions with interested investors regarding a sale of the subsidiaries that hold the land concession. As a result of this plan of disposal, the assets and liabilities have been classified as held for sale in our Consolidated Balance Sheets at December 31, 2012 and 2011 . At December 31, 2012, the carrying value of the net assets held for sale was lower than their estimated fair value less the estimated costs to sell. We have presented the operations of the business as a discontinued operation in the Consolidated Statements of Comprehensive Loss for the years ended December 31, 2012 , 2011 , and 2010 . See “Discontinued Operations” below. Discontinued Operations Assets and liabilities classified as held for sale at December 31, 2012 and 2011 are as follows: 69 2012 2011 (In millions) Macau Harrah's St. Louis Macau Total Assets Cash and cash equivalents $ 4.7 $ 10.0 $ 3.4 $ 13.4 Other current assets 0.4 1.6 0.5 2.1 Assets held for sale, current $ 5.1 $ 11.6 $ 3.9 $ 15.5 Property and equipment, net $ 471.2 $ 196.1 $ 584.3 $ 780.4 Goodwill — 104.4 — 104.4 Intangible assets other than goodwill — 292.7 — 292.7 Other long-term assets — 0.2 — 0.2 Assets held for sale, non-current $ 471.2 $ 593.4 $ 584.3 $ 1,177.7 Liabilities Accounts payable and accrued expenses $ 3.8 $ 10.1 $ 3.4 $ 13.5 Liabilities held for sale, current $ 3.8 $ 10.1 $ 3.4 $ 13.5 Deferred credits and other $ 0.2 $ — $ 0.1 $ 0.1 Deferred income taxes 51.9 — 66.2 66.2 Liabilities held for sale, non-current $ 52.1 $ — $ 66.3 $ 66.3 Net revenues, (loss)/income from operations before income taxes, and net (loss)/income presented as discontinued operations are as follows: Conrad Punta Del Este Resort and Casino In November 2012 , we entered into a definitive agreement with Enjoy S.A. (“Enjoy”) to form a strategic relationship in Latin America. Under the terms of the agreement, Enjoy will acquire 45% of Baluma S.A., our subsidiary which owns and operates the Conrad Punta Del Este Resort and Casino in Punta Del Este, Uruguay (the “Conrad”), for approximately $140.0 million in cash and stock, and we will become a 10% shareholder in Enjoy. Upon the closing of the transaction, which is subject to certain conditions, including the receipt of all regulatory and governmental approvals, Enjoy will assume primary responsibility for management of the Conrad and will have the option to acquire the remaining stake in Baluma S.A. between years three and five of the relationship. Note 4—Restricted Cash At December 31, 2012 and 2011 , the Company had $1,198.2 million and $517.7 million of restricted cash, comprised of current and non-current portions. In April 2011 , the Company borrowed $450.0 million in a senior secured term facility under an unrestricted subsidiary of CEOC, which is the financing incurred to complete the Octavius Tower at Caesars Palace Las Vegas (“Project Octavius”) and to develop a retail, dining, and entertainment corridor located between The Quad Resort & Casino (formerly the Imperial Palace Hotel and Casino) and the Flamingo Las Vegas on the Las Vegas Strip (“Project Linq” and, together with Project Octavius, the “Development”). The borrowing is secured by the Development assets, and funds raised that have not been spent on the Development are deemed restricted and are included in restricted cash at December 31, 2012 and 2011 . In November 2012 , the Company entered into a $185.0 million , seven-year senior credit facility to fund the renovation of Bill's Gamblin' Hall & Saloon into a boutique lifestyle hotel that includes a dayclub/nightclub. Funds raised that have not been spent on the renovation are deemed restricted and are included in restricted cash at December 31, 2012 . In December 2012 , CEOC completed the offering of $750.0 million aggregate principal amount of 9% senior secured notes due 2020 , the proceeds of which were placed into escrow and recorded as short-term restricted cash at December 31, 2012 . On February 20, 2013, the escrow conditions were satisfied. 70 Year ended December 31, (In millions) 2012 2011 2010 Net revenues Harrah's St. Louis $ 208.4 $ 257.7 $ 262.4 Macau 3.6 3.5 3.0 Total net revenues $ 212.0 $ 261.2 $ 265.4 Pre-tax (loss)/income from operations Harrah's St. Louis $ 62.2 $ 75.3 $ 65.7 Macau (121.6 ) (16.1 ) (15.8 ) Total pre-tax (loss)/income from discontinued operations $ (59.4 ) $ 59.2 $ 49.9 (Loss)/income, net of income taxes Harrah's St. Louis $ (1.7 ) $ 45.8 $ 39.8 Macau (107.8 ) (14.4 ) (13.7 ) Total (loss)/income from discontinued operations, net of income taxes $ (109.5 ) $ 31.4 $ 26.1 The PHW Las Vegas senior secured loan requires that the Company maintain certain reserve funds in respect of furniture, fixtures, and equipment; capital improvements, interest services, taxes, and insurance; and the commercial mortgage-backed securities (“CMBS”) financing includes affirmative covenants that require the properties securing the CMBS financing to maintain certain reserve funds in respect of furniture, fixtures, and equipment, taxes, and insurance, and comply with other customary obligations for CMBS real estate financings. These funds are deemed restricted and are included in restricted cash at December 31, 2012 and 2011 . Note 5 — Property and Equipment, net Property and equipment, net consists of the following: Interest capitalized was $38.2 million and $22.8 million for the years ended December 31, 2012 and 2011 , respectively. Interest capitalized in 2012 was primarily related to Project Linq. Depreciation expense, which is included in depreciation and amortization, corporate expense, and income from discontinued operations in our Consolidated Statements of Comprehensive Loss, is as follows: Tangible asset impairments Atlantic City We review the carrying value of property and equipment for impairment whenever events or circumstances indicate that the carrying value may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. There has been growing competitive and economic pressure in Atlantic City due to new competition in surrounding markets, exacerbated by significant hurricane-related closures in 2012 and 2011 . The collective effect of these trends has resulted in downward pressure on the Company's actual results from operations compared with prior years and with previous forecasts. As a result, the Company continues to evaluate its options for participation in the market. In connection with that evaluation, the Company determined it was necessary to complete an assessment for impairment for one of its Atlantic City properties. Upon the failure of step one of the assessment, we performed a fair value assessment of the property. As a result of this assessment, in December 2012, we recorded a tangible asset impairment of $450.0 million related to the property, comprised of $251.0 million related to building and improvements, $190.0 million for land and $9.0 million for furniture, fixtures, and equipment. With the help of a third-party valuation firm, we estimated the fair value of the property starting with a “Replacement Cost New” approach, and then deducting appropriate amounts for both functional and economic obsolescence to arrive at the fair value estimate. This analysis is sensitive to management assumptions and the estimates of the obsolescence factors, and increases or decreases in these assumptions and estimates would have a material impact on the analysis. 71 As of December 31, (In millions) 2012 2011 Land and land improvements $ 7,208.8 $ 7,411.8 Buildings, riverboats, and improvements 8,725.7 8,939.2 Furniture, fixtures, and equipment 2,491.0 2,333.3 Construction in progress 378.3 342.5 18,803.8 19,026.8 Less: accumulated depreciation (3,102.1 ) (2,541.2 ) $ 15,701.7 $ 16,485.6 Year Ended December 31, (In millions) 2012 2011 2010 Depreciation expense $ 751.6 $ 724.7 $ 747.0 Macau During 2012, we determined that it is more likely than not that we will divest of our investment in a land concession in Macau prior to the end of the remaining 35 -year term of the concession. As a result, we performed an impairment assessment on this investment and recorded a tangible asset impairment of $101.0 million . In the fourth quarter 2012, we began discussions with interested investors on a sale of the subsidiaries that hold our land concession in Macau. As a result of this plan of disposal the impairment charge was reclassified to discontinued operations in our Consolidated Statement of Comprehensive Loss for the year ended December 31, 2012. Biloxi In 2012, we recorded tangible asset impairments on a previously halted development project in Biloxi, Mississippi of $180.5 million . Note 6 — Goodwill and Other Intangible Assets The following table sets forth changes in the carrying value of our goodwill: During 2012 , we acquired substantially all of the net assets of Bubbler and Buffalo and recorded goodwill of $7.5 million and $6.8 million , respectively, based on the preliminary purchase price allocation. During 2012 , we contributed our interests in Thistledown to ROC and recorded a $20.1 million reduction of related goodwill. During 2011 , we acquired Playtika and recorded goodwill of $50.7 million based on the purchase price allocation. During the third quarter of 2012 , we completed a preliminary annual assessment of goodwill as of September 30 , which resulted in impairment charges of $247.0 million . These impairment charges were a result of the combination of an increase in our discount rate, and reduced projected revenues within our long-term operating plan as a result of the current economic climate. We finalized our annual assessment during the fourth quarter of 2012 once we completed our fair value analysis for reporting units where a step two impairment test was required and, as a result of the final assessment, we recorded a reversal of $60.0 million in impairment charges related to certain reporting units which were impaired during the third quarter . Also in the fourth quarter of 2012 , we performed an additional impairment assessment, due to further reduced projected earnings within our long-term operating plan, and as a result we recorded an additional impairment charge of $8.2 million related to certain reporting units. Net goodwill impairments recorded during 2012 totaled $195.2 million . The Company did not have any reporting units with a zero or negative book value as of December 31, 2012 . During the third quarter of 2011 , we completed a preliminary annual assessment of goodwill as of September 30 , which did not result in an impairment charge. We finalized our annual assessment during the fourth quarter of 2011 once we completed our fair value analysis for reporting units where a step two impairment test was required and, as a result, we recorded an impairment of $3.0 million related to certain properties. 72 Gross Goodwill Accumulated Impairment Net Carrying Value (In millions) 2012 2011 2012 2011 2012 2011 Balance at January 1 $ 9,438.6 $ 9,391.7 $ (6,078.2 ) $ (6,075.2 ) $ 3,360.4 $ 3,316.5 Additions 14.3 50.7 — — 14.3 50.7 Impairments — — (195.2 ) (3.0 ) (195.2 ) (3.0 ) Contribution of Thistledown to ROC venture (20.1 ) — — — (20.1 ) — Other 0.9 (3.8 ) — — 0.9 (3.8 ) Balance at December 31 $ 9,433.7 $ 9,438.6 $ (6,273.4 ) $ (6,078.2 ) $ 3,160.3 $ 3,360.4 The following table sets forth the changes in the carrying value of our intangible assets other than goodwill: During 2012 , we acquired substantially all of the net assets of Buffalo Studios LLC and, based on the preliminary purchase price allocation, recorded amortizing intangible assets of $37.8 million related to developed games and game titles. During the second quarter of 2012 , due to weak economic conditions in certain gaming markets in which we operate, we performed an interim impairment assessment of non-amortizing intangible assets. This analysis resulted in an impairment charge of $33.0 million related to our trademark assets. During the third quarter of 2012 , we completed our annual assessment of non-amortizing intangible assets as of September 30 , which resulted in impairment charges of $159.0 million , comprised of $127.0 million related to trademarks and $32.0 million related to gaming rights. These impairment charges were the result of a combination of an increase in our discount rate, and reduced projected revenues associated with these intangible assets within our long-term operating plan as a result of the current economic climate. During the fourth quarter of 2012 , due to continued weak economic conditions in certain gaming markets in which we operate, we performed an interim impairment assessment of non-amortizing intangible assets. This analysis resulted in an impairment charge of $50.0 million , comprised of $49.0 million related to trademarks and $1.0 million related to gaming rights. The total amount of impairment charges recorded during 2012 was $242.0 million , comprised of $209.0 million related to trademarks and $33.0 million related to gaming rights. The table below summarizes our impairment charges for goodwill and other non-amortizing intangible assets included in intangible and tangible asset impairment charges in our Consolidated Statements of Comprehensive Loss for the period shown: 73 (In millions) Amortizing Non-Amortizing Balance at December 31, 2010 $ 1,235.1 $ 3,184.0 Impairments — (8.0 ) Additions 85.4 23.5 Amortization expense (156.7 ) — Foreign currency translation (0.1 ) — Balance at December 31, 2011 1,163.7 3,199.5 Impairments — (242.0 ) Additions 37.8 — Amortization expense (174.6 ) — Foreign currency translation 0.7 0.6 Balance at December 31, 2012 $ 1,027.6 $ 2,958.1 Year Ended December 31, (In millions) 2012 2011 2010 Goodwill $ 195.2 $ 3.0 $ 92.0 Trademarks 209.0 8.0 20.0 Gaming Rights and other 33.0 — 72.0 Total impairment of goodwill and other non-amortizing intangible assets $ 437.2 $ 11.0 $ 184.0 The following table provides the gross carrying value and accumulated amortization for each major class of intangible assets other than goodwill: The aggregate amortization expense for those intangible assets that continue to be amortized is reflected in amortization of intangible assets in the Consolidated Statements of Comprehensive Loss and was $174.6 million , $156.7 million and $160.8 million for the years ended December 31, 2012 , 2011 , and 2010 , respectively. Estimated annual amortization expense for each of the five years from 2013 through 2017 is $163.9 million , $151.9 million , $150.3 million , $135.4 million , and $126.0 million , respectively. Note 7 — Detail of Accrued Expenses Accrued expenses consists of the following: 74 December 31, 2012 December 31, 2011 (Dollars in millions) Weighted Average Remaining Useful Life (in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortizing intangible assets Customer relationships 7.0 $ 1,456.7 $ (618.0 ) $ 838.7 $ 1,456.7 $ (492.4 ) $ 964.3 Contract rights 2.0 145.1 (66.3 ) 78.8 144.4 (52.3 ) 92.1 Patented technology 3.8 156.7 (76.6 ) 80.1 118.9 (45.9 ) 73.0 Gaming rights 11.5 42.8 (12.8 ) 30.0 42.8 (10.2 ) 32.6 Trademarks 0.1 1.7 (1.7 ) — 7.8 (6.1 ) 1.7 $ 1,803.0 $ (775.4 ) 1,027.6 $ 1,770.6 $ (606.9 ) 1,163.7 Non-amortizing intangible assets Trademarks 1,699.7 1,908.7 Gaming rights 1,258.4 1,290.8 2,958.1 3,199.5 Total intangible assets other than goodwill $ 3,985.7 $ 4,363.2 As of December 31, (In millions) 2012 2011 Payroll and other compensation $ 206.7 $ 223.8 Self-insurance claims and reserves 202.0 209.2 Accrued taxes 147.0 147.3 Total Rewards liability 52.0 55.9 Advance deposits 138.6 142.3 Other accruals 348.4 288.9 $ 1,094.7 $ 1,067.4 Note 8 — Debt The following table presents our outstanding debt as of December 31, 2012 and 2011 : ____________________ 75 Detail of Debt (dollars in millions) Final Maturity Rate(s) at Dec. 31, 2012 Face Value at Dec. 31, 2012 Book Value at Dec. 31, 2012 Book Value at Dec. 31, 2011 Credit Facilities (c) Term Loans B1 - B3 2015 3.21% - 3.31% $ 1,025.8 $ 1,025.8 $ 5,000.5 Term Loan B4 2016 9.50% 970.0 954.5 961.2 Term Loan B5 2018 4.46% 1,222.7 1,218.8 1,218.2 Term Loan B6 2018 5.46% 2,853.8 2,812.6 — Revolving Credit Facility 2014 — — — 155.0 Revolving Credit Facility 2017 — — — — Secured Debt Senior Secured Notes (c) 2017 11.25% 2,095.0 2,060.2 2,054.6 Senior Secured Notes (c) 2020 8.50% 1,250.0 1,250.0 — Senior Secured Notes (c) 2020 (a) 9.00% 1,500.0 1,486.9 — CMBS Financing 2015 (b) 3.21% 4,664.1 4,660.5 5,026.0 Second-Priority Senior Secured Notes (c) 2018 12.75% 750.0 742.9 742.1 Second-Priority Senior Secured Notes (c) 2018 10.00% 4,553.1 2,260.2 2,131.2 Second-Priority Senior Secured Notes (c) 2015 10.00% 214.8 173.7 164.2 Chester Downs Term Loan — — — — 221.3 Chester Downs Senior Secured Notes 2020 9.25% 330.0 330.0 — PHW Las Vegas Senior Secured Loan 2015 (b) 3.07% 515.5 438.2 417.9 Linq/Octavius Senior Secured Loan 2017 9.25% 450.0 446.5 445.9 Bill's Gamblin' Hall & Saloon Credit Facility 2019 11.00% 185.0 181.4 — Subsidiary-Guaranteed Debt (d) Senior Notes 2016 10.75% 478.6 478.6 478.6 Senior PIK Toggle Notes 2018 10.75%/11.5% 9.7 9.7 8.6 Unsecured Senior Debt (c) 5.375% 2013 5.375% 125.2 116.6 108.6 7.00% 2013 7.00% 0.6 0.6 0.6 5.625% 2015 5.625% 364.5 306.7 287.7 6.50% 2016 6.50% 248.7 200.9 190.6 5.75% 2017 5.75% 147.9 108.7 107.2 Floating Rate Contingent Convertible Senior Notes 2024 0.57% 0.2 0.2 0.2 Other Unsecured Borrowings Special Improvement District Bonds 2037 5.30% 64.3 64.3 65.7 Other 2014 — 47.7 47.7 0.4 Capitalized Lease Obligations to 2017 3.57% - 11.0% 35.9 35.9 13.6 Total Debt 24,103.1 21,412.1 19,799.9 Current Portion of Long-Term Debt (a) (905.1 ) (879.9 ) (40.4 ) Long-Term Debt $ 23,198.0 $ 20,532.2 $ 19,759.5 (a) Includes the note offering that occurred in December 2012 . Although the notes mature in 2020 , $750.0 million face value notes offered in December 2012 are classified as short-term obligations within our December 31, 2012 balance sheet because the escrow conditions were not met as of that date. (b) Based on our ability and intent, assumes the exercise of extension options to move the maturity from 2013 to 2015 , subject to certain conditions. (c) Guaranteed by Caesars Entertainment. (d) Guaranteed by Caesars Entertainment and certain wholly-owned subsidiaries of CEOC. As of December 31, 2012 and 2011 , book values of debt are presented net of unamortized discounts of $2,691.0 million and $2,858.0 million , respectively. Current Portion of Long-Term Debt Our current portion of long-term debt includes required interim principal payments on certain Term Loans, the special improvement district bonds and capitalized lease obligations. The current portion of long-term debt also includes $750.0 million , $125.2 million and $0.6 million of 9.00% senior secured notes, 5.375% unsecured senior debt and 7.00% unsecured senior debt, respectively. The $750.0 million of 9.00% senior secured notes relate to the December 2012 offering, the proceeds of which were placed into escrow. This is classified as current portion of long-term debt in our Consolidated Balance Sheet at December 31, 2012 due to escrow conditions not being satisfied until February 20, 2013 . The current portion of long term debt excludes the PHW Las Vegas senior secured loan and CMBS Financing due in 2013 based upon our ability and intent to exercise of our option to extend the maturities to 2015 , subject to certain conditions. As of December 31, 2012 , aggregate annual principal maturities for the four years subsequent to 2013 , assuming all conditions to extend the maturities of the CMBS Financing and the PHW Las Vegas senior secured loan are met and such maturities are extended, are as follows: 2014 , $74.7 million ; 2015 , $6,839.5 million ; 2016 , $1,709.7 million ; and 2017 , $2,735.3 million . These maturities do not reflect the debt offering and credit facility amendments that were completed in 2013 . See Note 21 , " Subsequent Events ,” for more information. CEOC Credit Facilities In connection with the Acquisition, CEOC entered into the senior secured credit facilities (the “Credit Facilities”). This financing is neither secured nor guaranteed by Caesars Entertainment’s other direct subsidiaries, including the subsidiaries that own properties that are security for the CMBS Financing. In May 2011 , CEOC amended its Credit Facilities to, among other things: (i) allow CEOC to buy back loans from individual lenders at negotiated prices at any time, which may be less than par, (ii) allow CEOC to extend the maturity of term loans or revolving commitments, as applicable, and for CEOC to otherwise modify the terms of loans or revolving commitments in connection with such an extension, and (iii) modify certain other provisions of the Credit Facilities. CEOC also extended its Credit Facilities by (i) converting $799.4 million of B-1, B-2 and B-3 term loans held by consenting lenders to B-5 term loans with an extended maturity date of January 28, 2018 and a higher interest rate with respect to such extended term loans (the “Extended Term Loans”) and (ii) converting $423.3 million of revolver commitments held by consenting lenders into Extended Term Loans. During 2012, we (i) extended the maturity of $3,812.3 million B-1, B-2 and B-3 term loans held by consenting lenders from January 28, 2015 to January 28, 2018 and increased the interest rate with respect to such extended term loans (the “Term B-6 Loans”), (ii) converted $457.8 million original maturity revolver commitments held by consenting lenders to Term B-6 Loans and promptly following such conversion, repaid $1,574.3 million of term loans held by any consenting lender, (iii) extended the maturity of $37.2 million original maturity revolver commitments held by consenting lenders who elected not to convert their commitments to term loans from January 28, 2014 to January 28, 2017 and increased the interest rate and the undrawn commitment fee with respect to such extended revolver commitments, and upon the effectiveness of such extension, terminated $798.5 million of revolver commitments and increased the amount of outstanding Term B-6 Loans by $2,853.8 million , and (iv) modified certain other provisions of the Credit Facilities. The Term B-6 Loans have a springing maturity to April 14, 2017 if more than $250.0 million of CEOC's 11.25% senior secured notes due 2017 remain outstanding on April 14, 2017. In addition to the foregoing, CEOC may elect to extend and/or convert additional term loans and/or revolver commitments from time to time. As of December 31, 2012 , our Credit Facilities provide for senior secured financing of up to $6,480.6 million , consisting of (i) senior secured term loan facilities in an aggregate principal amount of $6,072.3 million with $1,025.8 million maturing on January 28, 2015, $970.0 million maturing on October 31, 2016 (the "Incremental Loans"), and $4,076.5 million maturing on January 28, 2018 , (ii) a senior secured revolving credit facility in an aggregate principal amount of up to $408.3 million , with $377.2 million maturing January 28, 2014, and $31.1 million maturing January 28, 2017, including both a letter of credit sub-facility and a swingline loan sub-facility. The term loans under the Credit Facilities require scheduled quarterly payments of $3.1 million , with the balance due at maturity. As of December 31, 2012 , $90.6 million of the revolving credit facility is committed to outstanding letters of credit. After consideration of the letter of credit commitments, $317.7 million of additional borrowing capacity was available to the Company under its revolving credit facility as of December 31, 2012 . 76 Subsequent to December 31, 2012 , CEOC consummated additional extension transactions with consenting lenders under its Credit Facilities and amended its Credit Facilities. See Note 21 , " Subsequent Events ,” for further discussion. Borrowings under the Credit Facilities, other than borrowings under the Incremental Loans, the Extended Term Loans and the Term B-6 Loans, bear interest at a rate equal to the then-current LIBOR rate, or at a rate equal to the alternate base rate, in each case plus an applicable margin. As of December 31, 2012 , the Credit Facilities, other than borrowings under the Incremental Loans, the Extended Term Loans and the Term B-6 Loans, bore interest at LIBOR plus 300 basis points for the term loans. The revolver loan bore interest at LIBOR plus 300 basis points or the alternate base rate plus 200 basis points. The swingline loan bore interest at the alternate base rate plus 150 basis points. The extended revolver loan bore interest at LIBOR plus 525 basis points or the alternate base rate plus 425 basis points. Borrowings under the Incremental Loans bear interest at a rate equal to either the alternate base rate or the greater of (i) the then-current LIBOR rate or (ii) 2.0% ; in each case plus an applicable margin. At December 31, 2012 , borrowings under the Incremental Loans bore interest at the minimum base rate of 2.0% , plus 750 basis points. Borrowings under the Extended Term Loans bear interest at a rate equal to either the alternate base rate or the then-current LIBOR rate, plus an applicable margin. At December 31, 2012 , borrowings under the Extended Term Loans bore interest at LIBOR plus 425 basis points. Borrowings under the Term B-6 Loans bear interest at a rate equal to either the alternate base rate or the then-current LIBOR rate, plus an applicable margin. At December 31, 2012 , borrowings under the Term B-6 Loans bore interest at LIBOR plus 525 basis points. In addition, on a quarterly basis, we are required to pay each lender (i) a commitment fee in respect of any unborrowed amounts under the revolving credit facility and (ii) a letter of credit fee in respect of the aggregate face amount of outstanding letters of credit under the revolving credit facility. As of December 31, 2012 , the Credit Facilities bore a commitment fee for unborrowed amounts of 50 basis points. CEOC’s Credit Facilities are guaranteed by Caesars Entertainment and are secured by a pledge of CEOC’s capital stock and by substantially all of the existing and future property and assets of CEOC and its material, wholly-owned domestic subsidiaries, including a pledge of the capital stock of CEOC’s material, wholly-owned domestic subsidiaries and 65.0% of the capital stock of the first-tier foreign subsidiaries, in each case subject to exceptions. At December 31, 2012 , the following casino properties have mortgages under the Credit Facilities: Additionally, certain undeveloped land in Las Vegas is mortgaged. 77 Las Vegas Atlantic City Louisiana/Mississippi Iowa/Missouri Caesars Palace Bally’s Atlantic City Harrah’s New Orleans Harrah’s Council Bluffs Bally’s Las Vegas Caesars Atlantic City (Hotel only) Horseshoe Council Bluffs/ The Quad Resort & Casino Showboat Atlantic City Harrah’s Louisiana Downs Bluffs Run Horseshoe Bossier City Harrah’s Tunica Horseshoe Tunica Tunica Roadhouse Hotel & Casino Illinois/Indiana Other Nevada Horseshoe Southern Indiana Harrah’s Reno Harrah’s Metropolis Harrah’s Lake Tahoe Horseshoe Hammond Harveys Lake Tahoe CEOC Bond Offerings In February 2012 , CEOC completed the offering of $1,250.0 million aggregate principal amount of 8.5% senior secured notes due 2020 . CEOC used $1,095.6 million of the net proceeds from this transaction to repay a portion of the Credit Facilities in connection with the consummation of the transactions as further discussed in the Credit Facilities section above. In August 2012 , CEOC completed the offering of $750.0 million aggregate principal amount of 9% senior secured notes due 2020 . CEOC used $478.8 million of the net proceeds from this transaction to repay a portion of the Credit Facilities in connection with the consummation of the transactions as further discussed in the Credit Facilities section above. In December 2012 , CEOC completed the offering of $750.0 million aggregate principal amount of 9% senior secured notes due 2020 , the proceeds of which were placed into escrow and are recorded as short-term restricted cash in our Consolidated Balance Sheet at December 31, 2012 . See Note 21 , “ Subsequent Events ” for further discussion. Subsequent to December 31, 2012 , CEOC completed the offering of $1,500.0 million aggregate principal amount of 9% senior notes due 2020 . See Note 21 , “ Subsequent Events ” for further discussion. Our Senior Secured Notes, including the Second-Priority Senior Secured Notes, and our unsecured debt, which is fixed-rate debt, have semi-annual interest payments, with the majority of those payments on June 15 and December 15. CMBS Financing In connection with the Acquisition, eight of our properties (the “CMBS properties”) and their related assets were spun out of CEOC to Caesars Entertainment. As of the Acquisition date, the CMBS properties were Harrah's Las Vegas, Rio, Flamingo Las Vegas, Harrah's Atlantic City, Showboat Atlantic City, Harrah's Lake Tahoe, Harveys Lake Tahoe and Bill's Lake Tahoe. The CMBS properties borrowed $6,500.0 million of CMBS financing (the “CMBS Financing”). The CMBS Financing is secured by the assets of the CMBS properties and certain aspects of the financing are guaranteed by Caesars Entertainment. On May 22, 2008 , Paris Las Vegas and Harrah's Laughlin and their related operating assets were spun out of CEOC to Caesars Entertainment and became property secured under the CMBS mortgage loan and/or related mezzanine loans (“CMBS Loans”), and Harrah's Lake Tahoe, Harveys Lake Tahoe, Bill's Lake Tahoe and Showboat Atlantic City were transferred to CEOC from Caesars Entertainment as contemplated under the debt agreements effective pursuant to the Acquisition. On August 31, 2010 , we executed an agreement with the lenders to amend the terms of our CMBS Financing to, among other things, (i) provide our subsidiaries that are borrowers under the CMBS Loans the right to extend the maturity of the CMBS Loans, subject to certain conditions, by up to two years until February 13, 2015 , (ii) amend certain terms of the CMBS Loans with respect to reserve requirements, collateral rights, property release prices and the payment of management fees, (iii) provide for ongoing mandatory offers to repurchase CMBS Loans using excess cash flow from the CMBS entities at discounted prices, (iv) provide for the amortization of the mortgage loan in certain minimum amounts upon the occurrence of certain conditions and (v) provide for certain limitations with respect to the amount of excess cash flow from the CMBS entities that may be distributed to us. Any CMBS Loan purchased pursuant to the amendments will be canceled. The conditions to the first extension of the initial maturity date to February 13, 2014 (the “first extended maturity date”) are (i) no default or event of default on the initial maturity date, (ii) notice of the election of the extension, (iii) delivery of an officer's certificate reaffirming and restating the representations and warranties in the loan agreements as of the initial maturity date, (iv) if the interest rate cap agreement then in effect is scheduled to mature prior to the first extended maturity date, the borrowers shall have obtained new or extended interest rate cap agreements extending the agreement through the first extended maturity date and (v) the borrowers shall have paid a 50 bps extension fee in respect of such extension. The conditions to the extension of the first extended maturity date to February 2015 (the “second extended maturity date”) are (i) no default or event of default on the first extended maturity date, (ii) notice of the election of the extension, (iii) delivery of an officer's certificate reaffirming and restating the representations and warranties in the loan agreements as of the first extended maturity date, (iv) if the interest rate cap agreement then in effect is scheduled to mature prior to the second extended maturity date, the borrowers shall have obtained new or extended interest rate cap agreements extending the agreement through the second extended maturity date, and (v) the borrowers shall have paid a 50 bps extension fee in respect of such extension. As part of the amended CMBS Loan Agreement, in order to extend the maturity of the CMBS Loans under the extension option, we are required to extend our interest rate cap agreement to cover the two years of extended maturity of the CMBS Loans, with a maximum aggregate purchase price for such extended interest rate cap of $5.0 million , which we funded in connection with the closing of the 2010 amendment to the CMBS Loan Agreement. 78 During 2010 , we purchased $361.7 million of aggregate face value of CMBS Loans for $155.3 million , recognizing total pre-tax gains of $167.6 million , net of deferred finance charges. During 2011 , we purchased $158.1 million of aggregate face value of CMBS Loans for $108.5 million , recognizing total pre-tax gains of $47.5 million , net of deferred finance charges. During 2012 , we purchased $367.3 million of aggregate face value of CMBS Loans for $229.3 million , recognizing total pre-tax gains of $135.0 million , net of deferred finance charges. Subsequent to December 31, 2012 , we executed the first extension of the initial maturity date to February 2014 as discussed in Note 21 , " Subsequent Events .” We make monthly interest payments on our CMBS Financing. PHW Las Vegas Senior Secured Loan In February 2010 , CEOC acquired 100% of the equity interests of PHW Las Vegas, which owns the Planet Hollywood Resort and Casino located in Las Vegas, Nevada. In connection with this transaction, PHW Las Vegas assumed a $554.3 million , face value, senior secured loan, and a subsidiary of CEOC canceled certain debt issued by PHW Las Vegas' predecessor entities. The outstanding amount is secured by the assets of PHW Las Vegas and is non-recourse to other subsidiaries of the Company. In connection with the transaction and the assumption of debt, PHW Las Vegas entered into the Amended and Restated Loan Agreement with Wells Fargo Bank, N.A., as trustee for The Credit Suisse First Boston Mortgage Securities Corp. Commercial Mortgage Pass-Through Certificates, Series 2007-TFL2 (“Lender”). On October 26, 2011 , we exercised the option to extend the PHW Las Vegas senior secured loan to 2013 . The loan contains an additional extension option which, if exercised, would extend its maturity until April 2015 . The conditions to extend the maturity date are (i) no default or event of default on the date that notice of the extension is given and on the first extended maturity date of December 9, 2013 , (ii) notice of the election of the extension, (iii) the purchase of an interest rate cap (or provision of an acceptable alternative letter of credit or other support) with a strike price such that our Debt Service Coverage Ratio is at least 1.1 : 1.00 as of the first extended maturity date and (iv) the ratio of (a) the Adjusted Net Cash Flow (defined as gross income from operations less operating expenses less 3% of gross income from operations) for the trailing twelve calendar month period to (b) the outstanding principal balance of the loan as of the first extended maturity date is not less than 9% . PHW Las Vegas is an unrestricted subsidiary of CEOC and, therefore, not a borrower under CEOC’s Credit Facilities. A subsidiary of CEOC manages the property for PHW Las Vegas for a fee. PHW Las Vegas may, at its option, voluntarily prepay the loan in whole or in part upon twenty (20) days prior written notice to Lender. PHW Las Vegas is required to prepay the loan in (i) the amount of any insurance proceeds received by Lender for which Lender is not obligated to make available to PHW Las Vegas for restoration in accordance with the terms of the Amended and Restated Loan Agreement, (ii) the amount of any proceeds received from the operator of the timeshare property adjacent to the Planet Hollywood Resort and Casino, subject to the limitations set forth in the Amended and Restated Loan Agreement, and (iii) the amount of any excess cash remaining after application of the cash management provisions of the Amended and Restated Loan Agreement. The PHW Las Vegas senior secured loan requires that the Company maintain certain reserve funds in respect of furniture, fixtures, and equipment, capital improvements, interest service, taxes and insurance. Certain amounts deposited into the specified reserve funds represent restricted cash. The amount outstanding under the PHW Las Vegas senior secured loan bears interest at a rate per annum equal to LIBOR plus 2.859% . A subsidiary of CEOC owns interest-only participations in a portion of the PHW Las Vegas senior secured loan that bear interest at a fixed rate equal to 1.59% per year. In connection with PHW Las Vegas’ Amended and Restated Loan Agreement, Caesars Entertainment entered into a Guaranty Agreement (the “Guaranty”) for the benefit of the Lender, pursuant to which Caesars Entertainment guaranteed to the Lender certain recourse liabilities of PHW Las Vegas. Caesars Entertainment’s maximum aggregate liability for such recourse liabilities is limited to $30.0 million , provided that such recourse liabilities of PHW Las Vegas do not arise from (i) events, acts, or circumstances that are actually committed by, or voluntarily or willfully brought about by, Caesars Entertainment or (ii) event, acts, or circumstances (regardless of the cause of the same) that provide actual benefit (in cash, cash equivalent, or other quantifiable amount) to the Company, to the full extent of the actual benefit received by the Company. Pursuant to the Guaranty, Caesars Entertainment is required to maintain a net worth or liquid assets of at least $100.0 million . 79 Octavius and Linq Projects On April 25, 2011 , the Company, together with certain indirect wholly-owned subsidiaries of CEOC (the “Borrowers”) entered into a credit agreement (the “Octavius/Linq Credit Agreement”) pursuant to which the Borrowers incurred financing to complete the Development. The Octavius/Linq Credit Agreement provides for a $450.0 million senior secured term facility (the “Term Facility”) with a six-year maturity, which is secured by all material assets of the Borrowers. The proceeds of the Term Facility were funded during the second quarter of 2011 and are included as restricted cash on the Company's balance sheet until drawn to pay for costs incurred in the Development. These funds are being used by the Borrowers to finance the Development and to pay fees and expenses incurred in connection with the Term Facility and the transactions related thereto. As a condition to the provision of the Term Facility, the Company provided a completion guarantee (the “Completion Guaranty”) with respect to the Development, which guarantees completion of the construction of the Development, availability of contemplated working capital and receipt of material permits and licenses necessary to open and operate the Development. The maximum liability of the Company under the completion guarantee is $25.0 million in respect of Project Octavius and $75.0 million in respect of Project Linq. In connection with the Development and the Term Facility, the Company contributed the existing Octavius Tower at Caesars Palace Las Vegas and related assets to one of the Borrowers, the book value of which was $312.0 million . In August 2011 , the Company completed the contribution of the existing O’Shea's casino (adjacent to the Flamingo Las Vegas) and related real property and other assets comprising the components of Project Linq to one of the Borrowers, the book value of which was $319.2 million . In connection with Project Octavius, one of the Borrowers leases the Octavius Tower at Caesars Palace Las Vegas to a wholly-owned subsidiary of CEOC. Upon completion of Project Linq, one of the Borrowers will lease the gaming space in Project Linq to a wholly-owned subsidiary of CEOC. The total lease payments will be $50.0 million annually once the Development is open. As described above, CEOC has guaranteed certain of the obligations of the lessees under the Project Octavius and Project Linq leases. Pursuant to the Octavius/Linq Credit Agreement, the Company is required to make cash contributions to the Borrowers from time to time to fund a total equity commitment to the Development of $76.0 million . In addition, from time to time, the Company may be required to make additional cash contributions to the Borrowers to fund certain portions of the Development upon the occurrence of certain conditions. In addition to potential contributions pursuant to the Completion Guaranty, the Company has guaranteed all payments of interest under the Term Facility until the commencement of operations of the Octavius Tower at Caesars Palace Las Vegas and Project Linq and guaranteed the performance of the Borrowers of the first lien leverage ratio maintenance covenant (the “Performance Guarantee”) by agreeing, upon certain conditions, to make cash equity contributions to the Borrowers from time to time pursuant to the terms of the Term Facility. The maximum liability of the Company under the performance guarantee is $50.0 million . Except in the circumstances described above, neither the Company nor CEOC has any material obligations under the Term Facility, and the Term Facility is non-recourse to the Company or CEOC. The Octavius/Linq Credit Agreement requires that the Borrowers maintain certain reserve funds in respect of furniture, fixtures, and equipment, capital improvements, interest service, taxes and insurance. Amounts deposited into the specified reserve funds represent restricted cash. In addition, the Octavius/Linq Credit Agreement requires up to 50.0% of excess cash flow (as defined in the agreement), depending on the Senior Secured Leverage Ratio for that period, be applied to prepay the Term Facility. The Linq/Octavius Term Facility bears interest at a rate equal to either the alternate base rate, plus an applicable margin or the greater of (i) the then-current LIBOR rate or (ii) 1.25% , in each case plus an applicable margin. At December 31, 2012 , borrowings under the agreement bore interest at the minimum base rate of 1.25% , plus 800 basis points. Bill's Credit Facility In November 2012 , the Company entered into a $185.0 million , seven-year senior secured credit facility bearing interest at LIBOR plus 9.75% with a LIBOR floor of 1.25% (the "Bill's Credit Facility") to fund the renovation of Bill's Gamblin' Hall & Saloon into a boutique lifestyle hotel that includes a dayclub/nightclub. The renovation will include a complete remodeling of the guest rooms, casino floor, and common areas, the addition of a second floor restaurant, and the construction of an approximately 65,000 square foot rooftop pool and dayclub/nightclub. The Company will own the property and manage the casino, hotel, and food and beverage operations, and the dayclub/nightclub will be leased to a third party. The proceeds of the Bill's Credit Facility were funded during the fourth quarter and are included as restricted cash on the Company's balance sheet until drawn to pay for costs incurred in the renovation. 80 As part of the credit facility, the Company provided a completion guarantee to ensure prompt and complete performance to (i) complete construction and pay all project costs in accordance with the loan documents, (ii) provide the initial working capital specified in the project budget, and (iii) obtain all material permits and licenses necessary for the commencement of operations. The maximum liability of the Company under the completion guarantee is $20.0 million . Other Financing Transactions In February 2012 , Chester Downs issued $330.0 million aggregate principal amount of 9.25% senior secured notes due 2020 through a private placement. Chester Downs used $232.4 million of the proceeds of the notes to repay the term loan due 2016 plus accrued interest and a prepayment penalty. The remaining proceeds were used to make a distribution to Chester Downs' managing member, Harrah's Chester Downs Investment Company, LLC, a wholly-owned subsidiary of CEOC, and for other general corporate purposes. During the second quarter of 2012 , a subsidiary of Caesars Entertainment purchased $5.9 million face value of CEOC debt for $3.2 million recognizing a pre-tax gain of $1.0 million , net of deferred finance charges. In June 2012 , a subsidiary of Caesars Entertainment issued a non-interest bearing convertible promissory note in the amount of $28.5 million . In November 2012 , a subsidiary of Caesars Entertainment issued an additional non-interest bearing convertible promissory note in the amount of $19.2 million . See Note 10 , “ Stockholders' Equity, Non-controlling Interests and Loss Per Share ," for more information. Restrictive Covenants and Other Matters The Credit Facilities require compliance on a quarterly basis with a maximum net senior secured first lien debt leverage test. In addition, the Credit Facilities include negative covenants, subject to certain exceptions, restricting or limiting CEOC’s ability and the ability of its restricted subsidiaries to, among other things: (i) incur additional debt; (ii) create liens on certain assets; (iii) enter into sale and lease-back transactions; (iv) make certain investments, loans, and advances; (v) consolidate, merge, sell, or otherwise dispose of all or any part of its assets or to purchase, lease, or otherwise acquire all or any substantial part of assets of any other person; (vi) pay dividends or make distributions or make other restricted payments; (vii) enter into certain transactions with its affiliates; (viii) engage in any business other than the business activity conducted at the closing date of the loan or business activities incidental or related thereto; (ix) amend or modify the articles or certificate of incorporation, by-laws, and certain agreements or make certain payments or modifications of indebtedness; and (x) designate or permit the designation of any indebtedness as “Designated Senior Debt.” Caesars Entertainment is not bound by any financial or negative covenants contained in CEOC’s credit agreement, other than with respect to the incurrence of liens on and the pledge of its stock of CEOC. All borrowings under the senior secured revolving credit facility are subject to the satisfaction of customary conditions, including the absence of a default, the accuracy of representations and warranties, and the requirement that such borrowing does not reduce the amount of obligations otherwise permitted to be secured under our Credit Facilities without ratably securing the retained notes. Certain of our borrowings have covenants and requirements that include, among other things, the maintenance of specific levels of financial ratios. Failure to comply with these covenants can result in limiting our long-term growth prospects by hindering our ability to incur future indebtedness or grow through acquisitions, or cause an event of default. Specifically, the Credit Facilities require CEOC to maintain a senior secured leverage ratio of no more than 4.75 to 1.0 , which is the ratio of senior first priority secured debt to last twelve months ("LTM") Adjusted EBITDA - Pro Forma - CEOC Restricted. This ratio excludes $2,200.0 million of first priority senior secured notes and up to $350.0 million aggregate principal amount of consolidated debt of subsidiaries that are not wholly-owned. This ratio also reduces the amount of senior first priority secured debt by the amount of unrestricted cash on hand. As of December 31, 2012 , CEOC's senior secured leverage ratio was 4.44 to 1.0 . We entered into an amendment to the Credit Facilities in February 2013. The closing of the transaction is subject to certain conditions, including required regulatory approvals. See Note 21 , " Subsequent Events ” for further discussion. 81 In addition, certain covenants contained in CEOC's Credit Facilities and indentures covering the Company's second priority senior secured notes and first priority senior secured notes restrict our ability to take certain actions such as incurring additional debt or making acquisitions if we are unable to meet a fixed charge coverage ratio (LTM Adjusted EBITDA - Pro Forma - CEOC Restricted to fixed charges) of at least 2.0 to 1.0 , a total first priority secured leverage ratio (first priority senior secured debt to LTM Adjusted EBITDA - Pro Forma - CEOC Restricted) of no more than 4.5 to 1.0 and/or a consolidated leverage ratio (consolidated total debt to LTM Adjusted EBITDA - Pro Forma - CEOC Restricted) of no more than 7.25 to 1.0 . As of December 31, 2012 , CEOC's total first priority secured leverage ratio and consolidated leverage ratio were 6.15 to 1.0 and 12.11 to 1.0 , respectively. For the year ended December 31, 2012 , CEOC's earnings were insufficient to cover fixed charges by $407.2 million . For purposes of calculating the fixed charge coverage ratio, fixed charges includes consolidated interest expense less interest income and any cash dividends paid on preferred stock (other than amounts eliminated in consolidation). For purposes of calculating the total first priority secured leverage ratio and the consolidated leverage ratio, the amounts of first priority senior secured debt and consolidated total debt, respectively, are reduced by the amount of unrestricted cash on hand. The covenants that provide for the fixed charge coverage ratio, total first priority secured leverage ratio and consolidated leverage ratio described in this paragraph are not maintenance covenants. The indenture and other agreements governing our cash pay debt and PIK toggle debt limit CEOC’s (and most of its subsidiaries’) ability to among other things: (i) incur additional debt or issue certain preferred shares; (ii) pay dividends or make distributions in respect of our capital stock or make other restricted payments; (iii) make certain investments; (iv) sell certain assets; (v) engage in any business or own any material asset other than all of the equity interest of CEOC so long as certain investors hold a majority of the notes; (vi) create or permit to exist dividend and/or payment restrictions affecting its restricted subsidiaries; (vii) create liens on certain assets to secure debt; (viii) consolidate, merge, sell or otherwise dispose of all or substantially all of its assets; (ix) enter into certain transactions with its affiliates; and (x) designate its subsidiaries as unrestricted subsidiaries. Subject to certain exceptions, the indenture governing the notes and the agreements governing the other cash pay debt and PIK toggle debt will permit us and our restricted subsidiaries to incur additional indebtedness, including secured indebtedness. The CMBS Financing includes negative covenants, subject to certain exceptions, restricting or limiting the ability of the borrowers and operating companies under the CMBS Financing to, among other things: (i) incur additional debt; (ii) create liens on assets; (iii) make certain investments, loans, and advances; (iv) consolidate, merge, sell, or otherwise dispose of all or any part of its assets or to purchase, lease, or otherwise acquire all or any substantial part of assets of any other person; (v) enter into certain transactions with its affiliates; (vi) engage in any business other than the ownership of the properties and business activities ancillary thereto; and (vi) amend or modify the articles or certificate of incorporation, by-laws, and certain agreements. The CMBS Financing also includes affirmative covenants that require the CMBS properties to, among other things, maintain the borrowers as "special-purpose entities", maintain certain reserve funds in respect of furniture, fixtures, and equipment, taxes, and insurance, and comply with other customary obligations for CMBS real estate financings. Amounts deposited into the specified reserve funds represent restricted cash. In addition, the CMBS Financing obligates the CMBS properties to apply excess cash flow in certain specified manners, depending on the outstanding principal amount of various tranches of the CMBS loans and other factors. These obligations will limit the amount of excess cash flow from the CMBS properties that may be distributed to Caesars Entertainment. For example, the CMBS properties are required to use 100% of excess cash flow to make ongoing mandatory offers on a quarterly basis to purchase CMBS mezzanine loans at discounted prices from the holders thereof. To the extent such offers are accepted, such excess cash flow will need to be so utilized and will not be available for distribution to Caesars Entertainment. To the extent such offers are not accepted with respect to any fiscal quarter, the amount of excess cash flow that may be distributed to Caesars Entertainment is limited to 85% of excess cash flow with respect to such quarter. In addition, the CMBS Financing provides that once the aggregate principal amount of the CMBS mezzanine loans is less than or equal to $625.0 million , the mortgage loan will begin to amortize on a quarterly basis in an amount equal to the greater of 100% of excess cash flow for such quarter and $31.3 million . If the CMBS mortgage loan begins to amortize, the excess cash flow from the CMBS properties will need to be applied to such amortization and will not be available for distribution to Caesars Entertainment. As a result of the restrictions from CEOC's borrowings, CMBS Financing and other arrangements, the amount of restricted net assets of our consolidated subsidiaries held at December 31, 2012 and 2011 was approximately $1.2 billion and $1.1 billion , respectively. 82 Note 9 — Derivative Instruments Derivative Instruments – Interest Rate Swap Agreements We use interest rate swaps to manage the mix of our debt between fixed and variable rate instruments. As of December 31, 2012 , we have entered into eight interest rate swap agreements for notional amounts totaling $5,750.0 million . The difference to be paid or received under the terms of the interest rate swap agreements is accrued as interest rates change and recognized as an adjustment to interest expense for the related debt. Changes in the variable interest rates to be paid or received pursuant to the terms of the interest rate swap agreements will have a corresponding effect on future cash flows. The major terms of the interest rate swap agreements as of December 31, 2012 are as follows: The variable rate received on our interest rate swap agreements did not materially change as a result of the January 25, 2013 reset. During the second quarter of 2011, the Company completed transactions to amend and extend certain swap contracts. Prior to the amendment, a $1,000.0 million swap had a fixed payment rate of 4.172% and a maturity date of April 25, 2012 . Two $2,000.0 million swaps were split into four $1,000.0 million tranches. The previous terms included fixed payment rates of 4.276% and 4.263% and maturity dates of April 25, 2013 . The amended payment rates and maturity dates are shown in the table above. In December 2011 , the Company amended the terms of two $1,000.0 million swap contracts with a corresponding change in the elected interest rate on $2,000.0 million of term loans. Effective January 25, 2012 through January 25, 2014 , the variable rate received on the swaps changed from three-month to one-month LIBOR , and the fixed payment rate is reduced by 12 basis points. In connection with the amendment, the Company determined that it was not probable that previously forecasted transactions would occur on all interest rate swaps. Therefore, we removed the cash flow hedging designation for all of our interest rate swap agreements and were required to reclassify $183.2 million of deferred losses recorded in AOCL into interest expense. Prior to removing the cash flow hedging designation, we amortized $51.2 million of deferred losses frozen in AOCL to interest expense for the year ended December 31, 2011 . Any future changes in fair value of the swap agreements will be recognized in interest expense during the period in which the changes in value occur. On January 18, 2012 , the Company amended the terms of three $1,000.0 million notional value of interest rate swap contracts with a corresponding change in the elected interest rate on $3,000.0 million of term loans under the Credit Facilities. Effective January 25, 2012 through January 25, 2014 , the variable rate received on the swaps changed from three-month to one-month LIBOR and the fixed payment rate was reduced by 16.5 basis points. The table above reflects the amended payment rates. 83 Effective Date Notional Amount (In millions) Fixed Rate Paid Variable Rate Received as of Dec. 31, 2012 Next Reset Date Maturity Date April 25, 2011 $ 250.0 1.351 % 0.210 % January 25, 2013 January 25, 2015 April 25, 2011 250.0 1.347 % 0.210 % January 25, 2013 January 25, 2015 April 25, 2011 250.0 1.350 % 0.210 % January 25, 2013 January 25, 2015 January 25, 2011 1,000.0 3.068 % 0.210 % January 25, 2013 January 25, 2015 April 25, 2011 1,000.0 3.150 % 0.210 % January 25, 2013 January 25, 2015 January 25, 2011 1,000.0 3.750 % 0.210 % January 25, 2013 January 25, 2015 April 25, 2011 1,000.0 3.264 % 0.210 % January 25, 2013 January 25, 2015 January 25, 2011 1,000.0 3.814 % 0.210 % January 25, 2013 January 25, 2015 Derivative Instruments – Interest Rate Cap Agreements We have an interest rate cap agreement to partially hedge the risk of future increases in the variable rate of the CMBS Financing. The CMBS interest rate cap agreement, which was effective in January 2008 and terminates February 13, 2013 , is for a notional amount of $6,500.0 million at a LIBOR cap rate of 4.5% . See Note 21 , " Subsequent Events ,” for further discussion. In 2010 , we removed the cash flow hedge designation freezing the amount of deferred losses recorded in AOCL associated with the interest rate cap. Subsequently, we began amortizing deferred losses frozen in AOCL into income over the original remaining term of the hedge forecasted transactions that are still probable of occurring. For the years ended December 31, 2012 , 2011 and 2010 we recorded $20.9 million , $20.9 million and $19.2 million , respectively, as an increase to interest expense, and we will record an additional $2.6 million as an increase to interest expense and AOCL through the termination date, all related to deferred losses on the interest rate cap. At December 31, 2012 , $4,650.2 million of the interest rate cap was designated a cash flow hedging instrument for accounting purposes. Any future changes in fair value of the portion of the interest rate cap not designated as a hedging instrument will be recognized in interest expense during the period in which the changes in value occur. The hedging relationship between the CMBS Financing and the interest rate cap has remained effective subsequent to each debt extinguishment. In connection with the extinguishments, we reclassified deferred losses out of AOCL and into interest expense associated with the hedge for which the forecasted future transactions are no longer probable of occurring. In 2010 , as required under the PHW Las Vegas Amended and Restated Loan Agreement, we entered into an interest rate cap agreement to partially hedge the risk of future increases in the variable rate of the PHW Las Vegas senior secured loan. The interest rate cap agreement was for a notional amount of $554.3 million at a LIBOR cap rate of 5.0% and matured on December 9, 2011 . To give proper consideration to the prepayment requirements of the PHW Las Vegas senior secured loan, we designated $525.0 million of the $554.3 million notional amount of the interest rate cap as a cash flow hedging instrument for accounting purposes. On May 1, 2011 , we removed the cash flow hedging designation for the interest rate cap agreement. On December 9, 2011 , we entered into a new interest rate cap agreement for a notional amount of $517.7 million at a LIBOR cap rate of 7.0% and matures on December 9, 2013 . Any change in fair value is recognized in interest expense during the period in which the change in value occurs. Derivative Instruments – Other During the second quarter of 2012 , the Company entered into a written put option (the “Option”) for certain preferred equity interests of an investee. The potential future aggregate cash payments of $19.0 million as of December 31, 2012 related to the Option may occur from time to time. Based on the structure of this security as a written put option, the obligation for these potential cash payments is not reflected in our Consolidated Balance Sheets. Additionally, the Option is recorded in our Consolidated Balance Sheets at its fair value, which was de minimis as of December 31, 2012 . Derivative Instruments – Impact on Financial Statements The following table represents the fair values of derivative instruments in the Consolidated Balance Sheets as of December 31 : 84 Asset Derivatives Liability Derivatives 2012 2011 2012 2011 (In millions) Balance Sheet Location Fair Value Balance Sheet Location Fair Value Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives designated as hedging instruments Interest rate cap $ — $ — $ — $ — Derivatives not designated as hedging instruments Interest rate swaps — — Deferred credits and other (306.4 ) Deferred credits and other (336.1 ) Interest rate cap — — — — Total Derivatives $ — $ — $ (306.4 ) $ (336.1 ) The following table represents the effect of derivative instruments in the Consolidated Statement of Comprehensive Loss for the years ended December 31, 2012 , 2011 , and 2010 for amounts transferred into or out of AOCL: In addition to the impact on interest expense from amounts reclassified from AOCL, the difference to be paid or received under the terms of the interest rate swap agreements is recognized as interest expense and is paid monthly. This cash settlement portion of the interest rate swap agreements increased interest expense for the years ended December 31, 2012 , 2011 , and 2010 by $169.6 million , $201.1 million and $265.8 million , respectively. At December 31, 2012 , our variable-rate debt, excluding $5,750.0 million of variable-rate debt hedged using interest rate swap agreements, represents 25% of our total debt, while our fixed-rate debt is 75% of our total debt. Note 10 — Stockholders' Equity, Non-controlling Interests and Loss Per Share Stockholders' Equity Common Stock The holders of common stock are entitled to one vote per share on all matters to be voted on by the stockholders of the Company. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, holders of common stock shall receive a pro rata distribution of any remaining assets after payment of or provision for liabilities and the liquidation preference on preferred stock, if any. In January 2012 , the Company entered into an agreement with certain of its direct and indirect stockholders, pursuant to which the Company, Hamlet Holdings, and entities controlled by the Sponsors released the contractual transfer restrictions on 24.2 million shares of our common stock (the “Released Shares”) beneficially owned by certain indirect stockholders (the “Participating Co-Investors”). In consideration for such release, the Participating Co-Investors agreed to contribute 1.8 million shares to the Company (the “Delivered Shares”). The Company agreed to cause the registration for resale (the “Shelf Registration”) under the Securities Act of the remaining Released Shares not constituting Delivered Shares (the “Registered Shares”) and the listing of the Registered Shares on NASDAQ. In February 2012 , the Company received the Delivered Shares, placed them into its treasury, and offered 1.8 million newly issued shares of its common stock and an underwriters allotment of 271,697 shares, in a public offering, at $9.00 per share. The Company received net proceeds of $15.2 million on February 13, 2012 , after taking into account expenses and underwriting commissions and giving effect to the exercise of the underwriters' overallotment option. As a result of the public offering, the Company's common stock trades on the NASDAQ under the symbol “CZR.” In connection with this public offering, the Company effected a 1.742 -for- one split of its common stock and used the net proceeds from its public offering for general corporate purposes. None of the Sponsors or affiliates or employees of the Company participated in the public offering as selling stockholders. 85 (In millions) Amount of (Gain) or Loss Recognized in AOCL (Effective Portion) Location of (Gain) or Loss Reclassified from AOCL Into Net Loss (Effective Portion) Amount of (Gain) or Loss Reclassified from AOCL into Net Loss (Effective Portion) Location of (Gain) or Loss Recognized in Net Loss (Ineffective Portion) Amount of (Gain) or Loss Recognized in Net Loss (Ineffective Portion) Derivatives designated as hedging instruments 2012 2011 2010 2012 2011 2010 2012 2011 2010 Interest Rate Contracts $ — $ 64.3 $ 99.2 Interest Expense $ 28.4 $ 265.7 $ 36.3 Interest Expense $ — $ (53.4 ) $ (76.6 ) Amount of (Gain) or Loss Recognized in Net Loss Derivatives not designated as hedging instruments Location of (Gain) or Loss Recognized in Net Loss 2012 2011 2010 Interest Rate Contracts Interest Expense $ (29.6 ) $ (16.9 ) $ 1.9 In February 2012 , the Shelf Registration was filed, and, upon its effectiveness, 50% of the Registered Shares became eligible for resale under the Shelf Registration. The remaining 50% of the Registered Shares became eligible for resale in August 2012 . In March 2012 , the Company filed a prospectus with the SEC, as part of a registration statement, to sell shares of our common stock, up to a maximum aggregate offering price of $500.0 million . In April 2012 , the Company entered into an equity distribution agreement with Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC, whereby the Company may issue and sell up to 10.0 million shares of the Company's common stock from time to time. As of December 31, 2012 , the Company had sold 15,000 shares with an aggregate offering price of $216,000 . Non-controlling Interests In March 2012 , Rock Gaming and CIE, a majority-owned subsidiary of Caesars, entered into an agreement pursuant to which Rock Gaming purchased approximately 6,155 shares of CIE common stock for consideration of $30.4 million in cash and agreed to purchase additional shares of CIE common stock on or before July 2, 2012 . In June 2012 , CIE and Rock Gaming modified the agreement such that CIE issued to Rock Gaming approximately 382 shares of CIE common stock and a non-interest bearing convertible promissory note for $28.5 million in exchange for consideration of $30.4 million in cash. The promissory note is convertible into approximately 5,773 shares of CIE common stock. In November 2012 , CIE issued to Rock Gaming an additional non-interest bearing convertible promissory note for $19.2 million in exchange for consideration of $19.2 million in cash. The additional promissory note is convertible into approximately 3,140 shares of CIE common stock. The ability to convert the promissory notes into shares is subject to the satisfaction of certain specified criteria and both promissory notes are classified as long-term debt in our Consolidated Balance Sheet at December 31, 2012 . Loss Per Share Basic earnings/(loss) per share from continuing operations and discontinued operations is calculated by dividing loss from continuing operations and income from discontinued operations, respectively, net of income taxes, by the weighted-average number of common shares outstanding for each period. Because the Company generated net losses for the years ended December 31, 2012 , 2011 and 2010 , the weighted-average basic shares outstanding was used in calculating diluted loss per share from continuing operations, and diluted (loss)/earnings per share from discontinued operations, as using diluted shares would be anti-dilutive to loss per share. The following table shows the weighted average number of shares that were excluded from the computation of diluted loss per share for the year ended December 31, 2012 , 2011 and 2010 , as they were anti-dilutive: ____________________ *Amount rounds to zero. 86 Year Ended December 31, (In millions) 2012 2011 2010 Stock options 6.1 5.9 7.2 Warrants 0.4 0.1 0.1 Restricted stock * — — Convertible preferred shares — — 24.4 6.5 6.0 31.7 Note 11—Accumulated Other Comprehensive Loss Accumulated Other Comprehensive Loss consists of the following: Note 12 — Write-downs, Reserves, and Project Opening Costs, net of Recoveries Write-downs, reserves, and project opening costs, net of recoveries include project opening costs and various pre-tax charges to record contingent liability reserves, costs associated with efficiency projects, project write-offs, demolition costs, and other non-routine transactions, net of recoveries of previously recorded non-routine items. The components of write-downs, reserves, and project opening costs, net of recoveries are as follows: Divestitures and abandonments include (gains)/losses on divested or abandoned assets and costs associated with various projects that are determined to no longer be viable. For 2012 , divestitures and abandonments included a charge of $15.0 million related to an investment in a potential venture. For 2012 and 2011 , divestitures and abandonments included charges of $28.8 million and $8.3 million , respectively, related to a previously halted development project in Biloxi, Mississippi. Divestitures and abandonments for 2010 primarily related to write-offs of specific assets associated with certain capital projects no longer expected to be completed in the Las Vegas and Atlantic City regions. Remediation costs relate to projects at certain of our Las Vegas properties. For 2010 , we recorded a $52.2 million write-down on a long-term note receivable related to land and pre-development costs contributed to a venture for development of a casino project in Philadelphia with which we were involved. In April 2010 , the proposed operator for the project withdrew from the project and the Pennsylvania Gaming Control Board commenced proceedings to revoke the license for the project. As a result, we fully reserved the note. Efficiency projects represent costs incurred to identify and implement efficiency programs aimed at streamlining corporate and operating functions to achieve cost savings and efficiencies, including Project Renewal, an initiative designed to reinvent certain aspects of the Company's functional and operating units to gain significant further cost reductions and streamline its operations. Litigation reserves, awards, and settlements include costs incurred or reversed as a result of the Company’s involvement in various litigation matters, including contingent losses. During 2010 , we recorded a $25.0 million charge related to the Hilton matter, which is more fully discussed in Note 15 , " Litigation, Contractual Commitments and Contingent Liabilities ." 87 As of December 31, (In millions) 2012 2011 Defined benefit plan adjustments, net of tax $ (77.5 ) $ (66.6 ) Foreign currency translation, net of tax 12.7 (6.1 ) Net unrealized losses on derivative instruments, net of tax (8.7 ) (26.8 ) Net unrealized gains on investments, net of tax 2.6 3.1 $ (70.9 ) $ (96.4 ) Year Ended December 31, (In millions) 2012 2011 2010 Write-downs and reserves, net of recoveries: Divestitures and abandonments $ 59.1 $ 10.1 $ 29.0 Remediation costs 21.1 11.0 42.7 Write-down of long-term note receivable — — 52.2 Efficiency projects 17.5 46.6 1.4 Litigation reserves, awards, and settlements (0.2 ) 3.2 20.9 Gain on Thistledown contribution (11.0 ) — — Other 7.1 (1.8 ) 1.4 Total write-downs and reserves, net of recoveries 93.6 69.1 147.6 Project opening costs 12.6 4.7 2.1 Total write-downs, reserves, and project opening costs, net of recoveries $ 106.2 $ 73.8 $ 149.7 As previously discussed in Note 3 , " Acquisitions, Investments, Dispositions and Divestitures ,“ the Company divested of Thistledown, recognizing an $11.0 million gain on the transaction. Other includes demolition costs and other non-routine transactions. Note 13 — Income Taxes The components of (loss)/income before income taxes and the related (benefit)/provision for U.S. and other income taxes were as follows: Total income taxes were allocated as follows: The tax provision of $70.9 million allocated to accumulated other comprehensive income/(loss) in 2011 was primarily comprised of $117.3 million related to the reclassification of losses on derivative instruments from accumulated other comprehensive loss to interest expense, offset by tax benefits of $28.4 million related to the change in fair market value of derivatives and $19.2 million related to foreign currency translation adjustments. The tax impact for the components of accumulated other comprehensive income/(loss) in 2012 and 2010 were immaterial both individually and in the aggregate. 88 (Loss)/Income before Income Taxes Year Ended December 31, (In millions) 2012 2011 2010 United States $ (2,341.9 ) $ (1,271.5 ) $ (1,329.3 ) Outside of the U.S. 88.7 38.7 (12.6 ) $ (2,253.2 ) $ (1,232.8 ) $ (1,341.9 ) Income Tax (Benefit)/Provision Year Ended December 31, (In millions) 2012 2011 2010 United States Current Federal $ (72.0 ) $ (1.0 ) $ (215.1 ) State 5.6 (16.4 ) (7.7 ) Deferred Federal (726.7 ) (450.6 ) (221.9 ) State (87.1 ) (70.1 ) (61.1 ) Outside of the U.S. Current 13.0 8.7 10.4 Deferred (3.3 ) (5.3 ) 2.9 $ (870.5 ) $ (534.7 ) $ (492.5 ) Income Tax (Benefit)/Provision Year Ended December 31, (In millions) 2012 2011 2010 Loss from continuing operations, before income taxes $ (870.5 ) $ (534.7 ) $ (492.5 ) Discontinued operations 50.1 27.8 23.8 Accumulated other comprehensive income/(loss) 10.9 70.9 (10.5 ) Retained earnings — 6.0 — Additional paid in capital (2.1 ) 11.6 — The differences between the statutory federal income tax rate and the effective tax rate expressed as a percentage of income/(loss) from continuing operations before taxes were as follows: The major components of the deferred tax assets and liabilities in our Consolidated Balance Sheets as of December 31, 2012 and 2011 were as follows: 89 Year Ended December 31, 2012 2011 2010 Statutory tax rate 35.0 % 35.0 % 35.0 % Increases/(decreases) in tax resulting from: State taxes, net of federal tax benefit 4.4 9.2 5.8 Valuation allowance (2.3 ) (6.6 ) (3.2 ) Foreign income taxes — 2.8 1.2 Goodwill (1.4 ) 0.1 (2.2 ) Stock based compensation (0.2 ) — — Officers’ life insurance/insurance proceeds 0.2 (0.3 ) 0.1 Acquisition and integration costs (0.2 ) — — Reserves for uncertain tax positions 3.1 (0.2 ) (0.1 ) Deferred tax liability adjustment — 3.3 — Other — 0.1 0.1 Effective tax rate 38.6 % 43.4 % 36.7 % (In millions) 2012 2011 Deferred tax assets State net operating losses $ 180.3 $ 155.9 Foreign net operating losses 37.8 35.4 Federal net operating loss 850.2 617.7 Compensation programs 120.6 112.0 Allowance for doubtful accounts 87.6 112.2 Self-insurance reserves 15.7 28.4 Accrued expenses 44.6 57.0 Federal tax credits 33.7 22.4 Federal indirect tax benefits of uncertain state tax positions 52.8 59.6 Outside basis difference in foreign subsidiaries 61.5 — Other 20.6 57.2 Subtotal 1,505.4 1,257.8 Less: valuation allowance 330.0 210.7 Total deferred tax assets 1,175.4 1,047.1 Deferred tax liabilities Depreciation and other property-related items 2,241.7 2,540.8 Deferred cancellation of debt income and other debt-related items 1,913.4 1,983.1 Management and other contracts 3.9 8.2 Intangibles 1,255.7 1,517.5 Prepaid expenses 28.3 28.1 Investments in non-consolidated affiliates 3.5 (3.0 ) Total deferred tax liabilities 5,446.5 6,074.7 Net deferred tax liability $ 4,271.1 $ 5,027.6 Deferred tax assets and liabilities presented in our Consolidated Balance Sheets as of December 31, 2012 and 2011 were as follows: As a result of certain realization requirements of ASC Topic 718 , Compensation - Stock Compensation ("ASC Topic 718"), the table of deferred tax assets and liabilities shown above does not include certain deferred tax assets as of December 31, 2012 , and December 31, 2011 that arose directly from tax deductions related to equity compensation that are greater than the compensation recognized for financial reporting. Equity will be increased by $0.2 million if and when such deferred tax assets are ultimately realized. The Company uses ASC Topic 740 , Income Taxes ("ASC Topic 740"), ordering when determining when excess tax benefits have been realized. As of December 31, 2012 and 2011 , the Company had federal net operating loss (“NOL”) carryforwards of $2,418.2 million and $2,022.3 million , respectively. This NOL will begin to expire in 2029 . The federal NOL carryforwards per the income tax returns filed included unrecognized tax benefits taken in prior years. Due to application of ASC Topic 740 , the federal NOL carryforwards reflected in the income tax returns, as filed, are larger than the NOLs for which a deferred tax asset is recognized for financial statement purposes. In addition, the Company had federal general business tax credits carryforwards of $21.4 million which will begin to expire in 2029 . As of December 31, 2012 , no valuation allowance has been established for the Company’s federal NOL carryforwards or general business tax credits carryforwards deferred tax assets because the Company has sufficient future tax liabilities arising within the carryforward periods. However, the Company will continue to assess the need for an allowance in future periods. NOL carryforwards for the Company’s subsidiaries for state income taxes were $5,976.8 million and $5,878.8 million as of December 31, 2012 and 2011 , respectively. The state NOL carryforwards per the income tax returns filed included unrecognized tax benefits taken in prior years. Due to application of ASC Topic 740 , they are larger than the NOLs for which a deferred tax asset is recognized for financial statement purposes. We believe that it is more likely than not that the benefit from certain state NOL carryforwards will not be realized. In recognition of this risk, we have provided a valuation allowance of $163.9 million on the deferred tax assets relating to these NOL carryforwards and other state deferred tax assets which will not more likely than not be realized. We anticipate that state NOLs in the amount of $12.8 million will expire in 2013 . The remainder of the state NOLs will expire between 2014 and 2032 . NOL carryforwards of the Company’s foreign subsidiaries were $162.4 million and $139.8 million as of December 31, 2012 and 2011 , respectively. The majority of these foreign NOLs have an indefinite carryforward period but are subject to a full valuation allowance as the Company believes these assets do not meet the “more likely than not” criteria for recognition under ASC Topic 740 . As of December 31, 2012 and 2011 , the Company had foreign tax credit carryforwards of $12.3 million and $5.2 million , respectively. During 2012 , the Company amended its 2006 federal tax return to deduct $12.4 million of the foreign tax credits which were projected to expire in 2015 and the Company amended its 2007 federal tax return to claim $6.4 million of foreign tax credits which were projected to expire in 2015 . The remaining foreign tax credit carryforwards of $12.3 million is projected to expire unused in 2015 as the Company does not project to have sufficient future foreign source income in order to utilize these carryforwards. As such, the Company has provided a full valuation allowance against the foreign tax credit carryforward deferred tax asset. We do not provide for deferred taxes on the excess of the financial reporting over the tax basis in our investments in foreign subsidiaries that are essentially permanent in duration. That excess is estimated to total $98.2 million at December 31, 2012 . The additional deferred taxes, including foreign withholding taxes, that have not been provided is estimated at $31.4 million at December 31, 2012 . Included in the deferred tax assets is a deferred tax asset for the outside basis difference in the investments in foreign subsidiaries, which the Company believes is apparent will reverse in the foreseeable future. As the potential sale of this investment would generate a U.S. capital loss and the Company does not project generating any U.S. capital gains in the year of the sale or the related carryforward period, a full valuation allowance has been provided against this deferred tax asset. 90 (In millions) 2012 2011 Assets: Deferred income taxes (current) $ 114.9 $ 170.5 Liabilities: Liabilities held for sale (non-current) $ 51.9 $ 66.2 Deferred income taxes (non-current) 4,334.1 5,131.9 Net deferred tax liability $ 4,271.1 $ 5,027.6 A reconciliation of the beginning and ending amounts of gross unrecognized tax benefits is as follows: We classify reserves for tax uncertainties within accrued expenses and deferred credits and other in our Consolidated Balance Sheets, separate from any related income tax payable or deferred income taxes. In accordance with ASC 740 , reserve amounts relate to any potential income tax liabilities resulting from uncertain tax positions as well as potential interest or penalties associated with those liabilities. The reduction for tax positions from prior years in 2012 and the settlements in 2012 primarily relate to the settlements of the 2008 IRS exam appeal and the 2009 IRS examination. The Company recognized tax benefits through the reduction of tax expense of approximately $70.4 million related to those IRS settlements. We recognize interest and penalties accrued related to unrecognized tax benefits in income tax expense. We accrued approximately $19 million and $10 million during 2011 and 2010 , respectively. We reduced our accrual by approximately $8.0 million during 2012 due primarily to the IRS exam settlements noted above. In total, we have accrued balances of approximately $73 million , $80 million , and $64 million for the payment of interest and penalties at December 31, 2012 , 2011 and 2010 , respectively. Included in the balance of unrecognized tax benefits at December 31, 2012 , 2011 and 2010 are approximately $219 million , $287 million , and $312 million , respectively, of unrecognized tax benefits that, if recognized, would impact the effective tax rate. We file income tax returns, including returns for our subsidiaries, with federal, state, and foreign jurisdictions. We are under regular and recurring audit by the IRS and it is possible that the amount of the liability for unrecognized tax benefits could change during the next twelve months . We are also subject to exam by various state and foreign tax authorities. As of December 31, 2012 , the tax years prior to 2010 are no longer subject to examination for U.S. tax purposes. As of December 31, 2012 , the tax years prior to 2009 are no longer subject to examination for foreign and state income tax purposes as the statutes of limitations have lapsed. However, various subsidiaries could be examined by the New Jersey Division of Taxation for tax years beginning with 1999 due to our execution of New Jersey statute of limitation extensions. The Company believes that it is reasonably possible that the unrecognized tax benefits will not increase or decrease significantly within the next twelve months . Audit outcomes and the timing of audit settlements are subject to significant uncertainty. Although the Company believes that adequate provision has been made for such issues, there is the possibility that the ultimate resolution of such issues could have an adverse effect on our earnings. Conversely, if these issues are resolved favorably in the future, the related provision would be reduced, thus having a favorable impact on earnings. 91 (In millions) Balance at January 1, 2010 $ 362.0 Additions based on tax positions related to the current year 8.8 Additions for tax positions of prior years 224.2 Reductions for tax positions for prior years (26.5 ) Settlements — Expiration of statutes (1.1 ) Balance at December 31, 2010 $ 567.4 Additions based on tax positions related to the current year 4.2 Additions for tax positions of prior years 2.0 Reductions for tax positions for prior years (36.4 ) Settlements — Expiration of statutes (4.9 ) Balance at December 31, 2011 $ 532.3 Additions based on tax positions related to the current year 9.5 Additions for tax positions of prior years 3.3 Reductions for tax positions for prior years (203.7 ) Settlements (7.9 ) Expiration of statutes (0.1 ) Balance at December 31, 2012 $ 333.4 Note 14—Fair Value Measurements The fair value hierarchy defines fair value as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based upon assumptions that market participants would use in pricing an asset or liability. The fair value hierarchy establishes three tiers, which prioritize the inputs used in measuring fair value as follows: Our assessment of goodwill and other intangible assets for impairment includes an assessment using various Level 2 (EBITDA multiples and discount rate) and Level 3 (forecast cash flows) inputs. See Note 1 , " Summary of Significant Accounting Policies - Goodwill and Other Non-Amortizing Intangible Assets ," for more information on the application of the use of fair value methodology to measure goodwill and other intangible assets. Entities are permitted to choose to measure certain financial instruments and other items at fair value. We have not elected the fair value measurement option for any of our assets or liabilities that meet the criteria for this option. Items Measured at Fair Value on a Recurring Basis The following table shows the fair value of our financial assets and financial liabilities that are required to be measured at fair value as of the date shown: ____________________ * Amount rounds to zero The following section describes the valuation methodologies used to measure fair value, key inputs, and significant assumptions: Investments Investments consist of debt and equity securities with maturity dates greater than 90 days at the date of the security's acquisition. The majority of these securities are traded in active markets, have readily determined market values, and use Level 1 inputs. Securities for which there are not active markets or the market values are not readily determinable are valued using Level 2 inputs. All of these investments are included in either prepayments and other current assets or deferred charges and other in our Consolidated Balance Sheets. 92 Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date; Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. (In millions) Balance Level 1 Level 2 Level 3 December 31, 2012 Assets: Investments $ 155.2 $ 155.2 $ — $ — Derivative instruments * — * — Liabilities: Derivative instruments (306.4 ) — (306.4 ) — December 31, 2011 Assets: Investments $ 108.4 $ 106.9 $ 1.5 $ — Derivative instruments * — * — Liabilities: Derivative instruments (336.1 ) — (336.1 ) — The fair values of investments in marketable securities at December 31, 2012 and 2011 are as follows: Gross unrealized gains and losses on marketable securities as of December 31, 2012 and 2011 were not material. Derivative instruments The estimated fair values of our derivative instruments are derived from market prices obtained from dealer quotes for similar, but not identical, assets or liabilities. Such quotes represent the estimated amounts we would receive or pay to terminate the contracts. Derivative instruments are included in either deferred charges and other, or deferred credits and other, in our Consolidated Balance Sheets. Our derivatives are recorded at their fair values, adjusted for the credit rating of the counterparty if the derivative is an asset, or adjusted for the credit rating of the Company if the derivative is a liability. See Note 9 , " Derivative Instruments ," for more information. Items Measured at Fair Value on a Non-recurring Basis The following table shows the fair value of our assets that were required to be measured at fair value as of December 31, 2012 and the total impairment recorded on these assets during the year ended December 31, 2012 : The following section describes the valuation methodologies used to estimate or measure fair value, key inputs, and significant assumptions: Intangible and tangible assets Market and income approaches were used to value the intangible and tangible assets. Inputs included an expected range of market values, probabilities made by management that each value could be achieved, expected cash flows, recent comparable transactions, discounted cash flows, discount rate, royalty rate, growth rate, and tax rate. See Note 1 , " Summary of Significant Accounting Policies - Goodwill and Other Non-Amortizing Intangible Assets ," for further discussion regarding the valuation of our intangible assets and see Note 1 , " Summary of Significant Accounting Policies - Long-Lived Assets ," for further discussion regarding the valuation of our tangible assets. Items Disclosed at Fair Value Long-Term Debt The fair value of the Company’s debt has been calculated based on the borrowing rates available as of December 31, 2012 , for debt with similar terms and maturities, and based on market quotes of our publicly traded debt. As of December 31, 2012 , the Company’s outstanding debt had a fair value of $20,652.8 million and a carrying value of $21,412.1 million . 93 (In millions) 2012 2011 Corporate bonds $ — $ 1.5 Equity 2.8 2.4 Government bonds 111.4 102.5 Other liquid investments 41.0 2.0 Total Investments $ 155.2 $ 108.4 (In millions) Balance Level 1 Level 2 Level 3 Total Impairment Intangible and tangible assets $ 657.4 $ — $ — $ 657.4 $ (622.3 ) Note 15 — Litigation, Contractual Commitments and Contingent Liabilities Litigation The Supreme Court of Nevada decided in early 2008 that food purchased for subsequent use in the provision of complimentary and/or employee meals is exempt from use tax. Previously, such purchases were subject to use tax and the Company has claimed, but not recognized into earnings, a use tax refund totaling $32.2 million , plus interest, as a result of the 2008 decision. In early 2009 , the Nevada Department of Taxation ("Department”) audited our refund claim, but has taken the position that those same purchases are now subject to sales tax; therefore, they subsequently issued a sales tax assessment totaling $27.4 million plus interest after application of our refund on use tax. On October 21, 2010 , the administrative law judge (“ALJ”) issued a decision and ruled in our favor on a number of key issues, including that complimentary employee meals are not subject to sales tax. Although both the Company and the Nevada Department of Taxation filed an appeal of the decision with the Nevada Tax Commission (“Commission”), the case was returned to the ALJ for further factual development. The ALJ issued a second decision on March 8, 2012 , reversing her previous, partially favorable ruling relating to the taxability of complimentary employee meals and affirmed the taxability of complimentary meals but limited the entire sales tax assessment to the amount of the Company's use tax refund claims resulting in no use tax refund awarded but no sales tax amounts due. The ALJ decision was affirmed in the Commission hearing on June 25, 2012 and the Commission's final decision was issued on July 31, 2012 . We filed a petition for judicial review with the District Court on August 7, 2012 . On March 1, 2013, the District Court judge ruled that employee meals are not subject to sales tax but affirmed the application of sales tax to complimentary patron meals. Additionally, the judge ordered a refund of the portion of our use tax refund claims filed prior to October 1, 2005 without any offsetting sales tax assessments relating to complimentary patron meals for those periods. We expect that the District Court decision will be appealed to the Nevada Supreme Court. Subsequent to a written Commission decision issued in February 2012 for another gaming company, the Department has issued draft regulations requiring the collection of sales tax on the retail value of complimentary meals and the cost of employee meals. Although the Commission approved the regulation on June 25, 2012 , there are several additional approvals required, including by the Legislative Commission, before the regulation is finalized. On June 6, 2012 , the Department issued additional guidance regarding the payment of sales tax on complimentary and employee meals, maintaining that meals are taxable as of February 15, 2012 but that the payment of the tax is due, without penalty or interest, at the earlier of (a) one month after approval of the regulation by the Legislative Commission, (b) one month after a Nevada Supreme Court decision, (c) the effective date of any legislation or (d) June 30, 2013 . The Department stated that it provided this additional guidance regarding the deferral of payment requirements because the Legislative Commission has not had the opportunity to approve the regulation and because there are several ongoing appeals that have not been heard by the Tax Commission and the Nevada Supreme Court. As of December 31, 2012 we had accrued $16.4 million in sales tax accruals on complementary meals. Due to uncertainty regarding the ultimate outcome of our pending litigation and/or the final approval and form of the pending regulation, we continue to record sales tax reserves against loss on this matter. The Company is party to ordinary and routine litigation incidental to our business. We do not expect the outcome of any pending litigation to have a material effect on our consolidated financial position, results of operations, or cash flows. Contractual Commitments We continue to pursue additional casino development opportunities that may require, individually and in the aggregate, significant commitments of capital, up-front payments to third parties, and development completion guarantees. The agreements pursuant to which we manage casinos on Indian lands contain provisions required by law that provide that a minimum monthly payment be made to the tribe. That obligation has priority over scheduled repayments of borrowings for development costs and over the management fee earned and paid to the manager. In the event that insufficient cash flow is generated by the operations to fund this payment, we must pay the shortfall to the tribe. Subject to certain limitations as to time, such advances, if any, would be repaid to us in future periods in which operations generate cash flow in excess of the required minimum payment. These commitments will terminate upon the occurrence of certain defined events, including termination of the management contract. Our aggregate monthly commitment for the minimum guaranteed payments, pursuant to contracts for the three managed, Indian-owned facilities is $1.2 million . Each of these casinos currently generates sufficient cash flows to cover all of its obligations, including its debt service. 94 The table below gives the location and expiration date of the current management contracts for our three tribal casino properties as of December 31, 2012 : In addition to the guarantees discussed above, we had total aggregate non-cancelable purchase obligations of $806.7 million as of December 31, 2012 . Contingent Liabilities Employee Benefit Obligations In December 1998 , Hilton Hotels Corporation ("Hilton") spun-off its gaming operations as Park Place Entertainment Corporation ("Park Place"). In connection with the spin-off, Hilton and Park Place entered into various agreements, including an Employee Benefits and Other Employment Allocation Agreement dated December 31, 1998 (the "Allocation Agreement") whereby Park Place assumed or retained, as applicable, certain liabilities and excess assets, if any, related to the Hilton Hotels Retirement Plan (the "Hilton Plan") based on the accrued benefits of Hilton employees and Park Place employees. Park Place changed its name to Caesars Entertainment, Inc., and the Company acquired Caesars Entertainment, Inc. in June 2005 . In 1999 and 2005 , the United States District Court for the District of Columbia (the "Court") certified two nationwide classes in the lawsuit against Hilton and others alleging that the Hilton Plan's benefit formula was backloaded in violation of ERISA, and that Hilton and the other defendants failed to properly calculate Hilton Plan participants' service for vesting purposes. In May 2009 , the Court issued a decision granting summary judgment to the plaintiffs. Thereafter, the Court required the parties to attempt to agree on a remedies determination and further required the parties to submit briefs to the Court in support of their positions. On September 7, 2010 , the Court issued an opinion resolving certain of Hilton's and the plaintiffs' issues regarding a remedies determination and requiring the parties to confer and take other actions in an effort to resolve the remaining issues. On July 28 and 29 , 2011 , the Court held a hearing to address the remaining remedy issues and on August 31, 2011 , the Court issued a Memorandum Opinion and a final Order (the “Order”). In the Order, the Court ordered, among other things, Hilton to award back payments and commence increased benefits for all class members no later than January 1, 2012 or, in the case of any individual benefit or vesting disputes, within 30 days after the final dispute resolution by the Court. On September 28, 2011 , Hilton filed a Motion for Reconsideration to ask the Court to reconsider certain aspects of the Order. On October 5, 2011 , Hilton filed a Notice of Appeal to appeal all aspects of the Order and all other orders in the case to the United States Court of Appeals for the District of Columbia Circuit (the "Circuit Court") and on December 22, 2011 , plaintiffs filed a cross-appeal. On November 28, 2011 , Hilton filed a motion to stay the implementation of the backloading remedy pending the appeal and on January 19, 2012 , the Court granted Hilton's motion contingent upon Hilton posting a bond of $75.8 million by no later than February 21, 2012 . On December 14, 2012 , the Circuit Court affirmed the decisions of the Court. At various times prior to the Court’s 2010 opinion, we were advised by counsel for the defendants that the plaintiffs estimated that the damages were in the range of $80 million to $280 million . Counsel for the defendants further advised that approximately $50 million of the damages relates to questions regarding the proper size of the class and the amount, if any, of damages to any additional class members due to issues with Hilton’s record keeping. 95 Casino Location Expiration of Management Agreement Harrah’s Rincon near San Diego, California November 2014 Harrah’s Ak-Chin near Phoenix, Arizona December 2014 Harrah’s Cherokee Cherokee, North Carolina November 2018 The Company received a letter from Hilton dated October 7, 2009 notifying the Company for the first time of this lawsuit and alleging that the Company has potential liability for the above described claims under the terms of the Allocation Agreement. Based on the terms of the Allocation Agreement, the Company believes its maximum potential exposure is approximately 30 percent to 33 percent of the amount ultimately awarded as damages. The Company is not a party to the proceedings between the plaintiffs and the defendants and has not participated in the defense of the litigation or in any discussions between the plaintiffs and the defendants about potential remedies or damages. Further, the Company does not have access to information sufficient to enable the Company to make an independent judgment about the possible range of loss in connection with this matter. Based on conversations between our representative of the Company and a representative of the defendants, the Company believes it is probable that damages will be at least $80.0 million and, accordingly, the Company recorded a charge of $25.0 million in accordance with FASB Codification Subtopic 450 , Contingencies , during the second quarter 2010 in relation to this matter. The Company has not changed its belief respecting the damages which may be awarded in this lawsuit as a result of the 2010 opinion of the Court, the Order, or the Circuit Court's rulings. The Company also continues to believe that it may have various defenses if a claim under the Allocation Agreement is asserted against the Company, including defenses as to the amount of damages. Because the Company has not had access to sufficient information regarding this matter, we cannot at this time predict the ultimate outcome of this matter or the possible additional loss, if any. Self-Insurance We are self-insured for various levels of general liability, workers’ compensation, employee medical coverage, and other coverage. 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. At December 31, 2012 and 2011 , we had total self-insurance accruals reflected in our Consolidated Balance Sheets of $202.0 million and $209.2 million , respectively. Note 16—Leases We lease both real estate and equipment used in our operations and classify those leases as either operating or capital leases, for accounting purposes. At December 31, 2012 , the remaining lives of our operating leases ranged from one to 85 years, with various automatic extensions totaling up to 81 years. Rental expense, net of income from subleases, is associated with operating leases for continuing operations and is charged to expense in the year incurred. Net rental expense is included within each line of the Statements of Operations dependent upon the nature or use of the assets under lease. Total net rental expense was as follows: Our future minimum rental commitments as of December 31, 2012 are as follows: In addition to these minimum rental commitments, certain of our operating leases provide for contingent rentals based on a percentage of revenues in excess of specified amounts. 96 Year Ended December 31, (In millions) 2012 2011 2010 Noncancelable Minimum $ 115.2 $ 102.1 $ 89.7 Contingent 2.3 2.4 3.7 Sublease (0.9 ) (0.9 ) (1.6 ) Other 77.9 74.6 69.3 $ 194.5 $ 178.2 $ 161.1 (In millions) Noncancelable Operating Leases 2013 $ 71.2 2014 63.0 2015 60.7 2016 55.5 2017 54.0 Thereafter 1,320.3 Total minimum rental commitments $ 1,624.7 Note 17 — Supplemental Cash Flow Information Significant Non-cash Transactions Significant non-cash transactions in 2012 include non-cash goodwill and intangible asset impairments as discussed in Note 6, "Goodwill and Other Intangible Assets;" non-cash tangible asset impairments as discussed in Note 5, "Property and Equipment, Net;" foreign currency translation adjustments of $18.8 million ; a contribution of $42.9 million of equity interests in Thistledown to ROC as discussed in Note 3, “Acquisitions, Investments, Dispositions and Divestitures;” $35.8 million of assets acquired through capital leases; $55.1 million of share-based compensation expense; $41.4 million of non-cash write-downs and reserves, net of recoveries; and a contribution of 1.8 million shares by the Participating Co-Investors, as discussed in Note 10, “Stockholders' Equity, Non-controlling Interests and Loss Per Share." Significant non-cash transactions in 2011 include non-cash goodwill and intangible asset impairments as discussed in Note 6 , " Goodwill and Other Intangible Assets ," the change between the pre- and post-modification fair values related to the interest rate swap blend and extend transactions and the de-designation of certain interest rate swaps, both discussed in Note 9 , " Derivative Instruments ," the write off of specific assets as a result of the termination of a development stage project in Spain discussed in Note 12 , “ Write-downs, Reserves, and Project Opening Costs, net of Recoveries ,” and a $10.7 million adjustment to the accrued jackpot liability, and the corresponding cumulative effect adjustment to Accumulated Deficit, resulting from the adoption of the provision of new accounting requirements, that went into effect on January 1, 2011 . Significant non-cash transactions in 2010 include the non-cash goodwill and intangible asset impairment as discussed in Note 6 , " Goodwill and Other Intangible Assets ," the first quarter 2010 conversion of preferred shares into common shares and the elimination of cumulative dividends on such preferred shares, the second quarter 2010 write-down of a long-term note receivable and a contingent liability charge discussed in Note 12 , “ Write-downs, Reserves, and Project Opening Costs, net of Recoveries ,” and the fourth quarter 2010 exchange of debt for equity discussed in Note 8 , “ Debt ." In addition to the above, we record non-cash charges to interest expense as shown in the table in the Cash Paid for Interest section below. Cash Paid for Interest and Taxes The following table reconciles our interest expense, net of interest capitalized, per the Consolidated Statements of Comprehensive Loss, to cash paid for interest: ____________________ 97 Year Ended December 31, (In millions) 2012 2011 2010 Interest expense, net of interest capitalized (a) $ 2,101.3 $ 2,122.3 $ 1,981.6 Adjustments to reconcile to cash paid for interest: Net change in accruals (14.1 ) (12.5 ) (12.8 ) Amortization of deferred finance charges (88.5 ) (70.3 ) (76.4 ) Net amortization of discounts and premiums (226.3 ) (157.2 ) (163.7 ) Reclassification of accumulated other comprehensive loss — (183.2 ) — Amortization of other comprehensive income (29.1 ) (83.3 ) (36.3 ) Rollover of PIK interest to principal (1.0 ) (1.1 ) (1.0 ) Change in fair value of derivative instruments 29.6 70.3 74.7 Cash paid for interest $ 1,771.9 $ 1,685.0 $ 1,766.1 Cash payments (refunds) of income taxes, net (b) $ 16.5 $ 5.4 $ (190.2 ) (a) Interest capitalized in 2012 , 2011 , and 2010 was $38.2 million , $22.8 million , and $1.4 million , respectively. (b) The 2010 net receipt includes $220.8 million of federal income tax refund received, offset by other federal, state, and foreign taxes paid during the year. Note 18 — Employee Benefit Plans We have established a number of employee benefit programs for purposes of attracting, retaining, and motivating our employees. The following is a description of the basic components of these programs as of December 31, 2012 . Share-based Compensation Plans Our stock-based compensation expense consists primarily of time-based and performance-based options of Caesars Entertainment and one of its subsidiaries that have been granted to management, other personnel and key service providers. The Company has recognized compensation expense associated with its stock-based employee compensation programs as follows: During the year ended December 31, 2012 , the Company recorded $20.6 million of expense related to stock-based awards of one of its subsidiaries, of which $16.8 million related to liability-classified awards that are re-measured to fair value at each reporting date and $3.8 million related to equity-classified awards that are measured at their fair value at the date of grant. In 2010 , the Human Resources Committee of the Board of Directors of the Company adopted an amendment to the Company’s Management Equity Incentive Plan (the “Plan”) to revise the vesting hurdles for performance-based options under the Plan. The performance options vest if the return on investment in the Company of TPG, Apollo, and their respective affiliates and co-investors (the “Majority Stockholders”) achieves a specified return. Previously, 50.0% of the performance-based options vested upon a 2.0X return and 50.0% vested upon a 3.0X return. The triggers were revised to 1.5X and 2.5X , respectively. In addition, a pro-rata portion of the 2.5X options will vest if the Majority Stockholders achieve a return on their investment that is greater than 2.0X , but less than 2.5X . The pro-rata portion will increase on a straight line basis from zero to a participant’s total number of 2.5X options depending upon the level of returns that the Majority Stockholders realize between 2.0X and 2.5X . In July 2011 , the Human Resources Committee of the Board of Directors of the Company approved amendments to the Plan and to outstanding stock options which were granted pursuant to the Plan. Performance-based options will vest and become exercisable if the return on investment in the Company of the Majority Stockholders reaches at least 2.0X (rather than 2.5X , which applied prior to the amendments), and if the Majority Stockholders realize a return of less than 2.0X but equal to or greater than 1.75X , a pro-rata portion of such performance based options will vest based on straight line interpolation (collectively, the “Vesting Adjustment”). The exercise price of outstanding 1.5X performance-based options was reduced to $35 per share (pre-split per share exercise price). All outstanding 2.5X performance options were amended to reflect the Vesting Adjustment; however, the exercise price for the outstanding 2.5X , now 2.0X , performance options was not reduced to $35 per share (pre-split per share exercise price). Additionally, the exercise price for all outstanding time-based options was reduced to $35 per share (pre-split per share exercise price), with the reduced exercise price being phased in between a four - to six-year period , depending on grant date, as set forth in each individual award agreement. Prior to the phase in, any vested options may still be exercised at the original exercise price, subject to the terms of the Plan. As a result of these amendments, additional expense of $3.3 million and $3.2 million was recognized in 2012 and 2011 , respectively. In November 2011 , an amendment was approved to increase the available number of shares of the Company’s common stock for which options may be granted to 4,927,024 shares (pre-split number of shares). 98 (In millions) 2012 2011 2010 Amounts included in: Corporate expense $ 29.1 $ 13.8 $ 9.4 Property, general, administrative, and other 26.0 8.0 8.6 Total stock-based compensation expense $ 55.1 $ 21.8 $ 18.0 In February 2012 , the Company declared a 1.742 -for- one stock split in connection with its public offering, and the Board of Directors adopted the 2012 Performance Incentive Plan (the " 2012 Incentive Plan"). Directors, employees, officers and consultants or advisors who render services to the Company or its subsidiaries may be selected to receive awards under the 2012 Incentive Plan. Our Board of Directors or a subcommittee thereof has the authority to administer the 2012 Incentive Plan. The 2012 Incentive Plan includes the following limits: As a result of adopting the 2012 Incentive Plan, options may no longer be granted under the Company's Management Equity Incentive Plan adopted February 27, 2008 (the " 2008 Incentive Plan"). During the third quarter of 2012 , the Company's stockholders approved (1) an amendment to the 2012 Incentive Plan to increase the maximum number of shares of the Company's common stock with respect to which stock options and stock appreciation rights may be granted during any calendar year to any individual under the 2012 Incentive Plan from 3,433,509 shares to 6,500,000 shares, and (2) a one -time stock option exchange program (the “Option Exchange”), to permit the Company to cancel certain stock options held by some of our employees, service providers and directors in exchange for new, replacement options to purchase an equal number of shares of our common stock (the “Replacement Options”). Options eligible for the Option Exchange (the “Eligible Options”) were granted on or prior to February 9, 2012 and had an exercise price equal to or greater than $20.09 per share. Replacement Options have an exercise price of $8.22 per share, a ten-year term and a new vesting schedule determined on a grant-by-grant basis, as follows: 99 • no more than 15,449,468 shares may be issued with respect to incentive stock options under the 2012 Incentive Plan; • the maximum number of shares of common stock subject to those options and stock appreciation rights that are granted during any calendar year to any individual under the 2012 Incentive Plan is 3,433,509 shares, prior to consideration of the July 2012 amendment as further described below ; • the maximum number of shares of common stock which may be delivered pursuant to performance-based awards (other than options and stock appreciation rights intended to satisfy the requirements for “performance-based compensation” under Internal Revenue Code Section 162 (m), and other than cash awards covered by the cap in the following sentence) that are granted to any one participant in any calendar year will not exceed 1,373,404 shares, either individually or in the aggregate; • in addition, the aggregate amount of compensation to be paid to any one participant in respect of all performance-based awards payable only in cash and not related to shares of common stock and granted to that participant in any one calendar year will not exceed $25.0 million ; and • awards cancelled during the year will be counted against the limits in the preceding two bullets to the extent required by Section 162 (m) of the Internal Revenue Code. • Vesting of Time-Based Options . Each Replacement Option granted in exchange for a time-based eligible option will have a new vesting schedule as follows: 20% of the Replacement Options will be immediately vested, with the remainder vesting in four equal installments of 20% each on each of the first four anniversaries of the exchange date. • Vesting of Performance-Based Options . Each Replacement Option granted in exchange for a performance-based eligible option will have a new vesting schedule as follows: • With respect to the Eligible Options subject to vesting if funds affiliated with TPG and Apollo achieve a return on their investment that is equal to or greater than 1.5X , the Replacement Options granted in exchange for such options will vest on the date that the Company's 30 -day trailing average closing common stock price equals or exceeds $35.00 per share. • With respect to the Eligible Options subject to vesting if funds affiliated with the Sponsors achieve a return on their investment that is equal to or greater than 2.0x , the Replacement Options granted in exchange for such options will vest on the date that the Company's 30 -day trailing average closing common stock price equals or exceeds $57.41 per share. As a result of the Option Exchange, additional expense of $3.0 million was recognized in 2012 . An additional $12.2 million will be recognized in future periods as the Replacement Options vest. The following is a summary of share-based option activity, adjusted for the stock split, including options under the Plan and warrants to purchase common stock, for the years ended December 31, 2012 and 2011 : ____________________ The Company utilized historical optionee behavioral data to estimate the option exercise and termination rates used in the option-pricing models. The expected term of the options represents the period of time the options were expected to be outstanding based on historical trends. Expected volatility was based on the historical volatility of the common stock of Caesars Entertainment and its competitor peer group for a period approximating the expected life. The Company does not expect to pay dividends on common stock. The risk-free interest rate within the expected term was based on the U.S. Treasury yield curve in effect at the time of grant. Valuation assumptions for the indicated periods are presented below: ____________________ As of December 31, 2012 , there was $82.7 million of total unrecognized compensation cost related to stock option grants. This cost is expected to be recognized over a remaining weighted-average period of 6.8 years . 100 • Vesting of Loveman Performance-Based Option . With respect to the Eligible Option to purchase 290,334 shares of the Company's common stock granted on November 29, 2011 to Gary Loveman, the Company's Chairman of the Board, Chief Executive Officer and President, the vesting of which differs from the vesting of the other outstanding performance-based eligible options described above and is eligible to vest if funds affiliated with the Sponsors achieve a return on their investment that is equal to or greater than 1.0x (the “Loveman Performance-Based Option”), the Replacement Option granted in exchange for the Loveman Performance-Based Option will vest on the date that the Company's 30 -day trailing average closing common stock price equals or exceeds $57.41 per share. Shares (1) Weighted Average Exercise Price (1) Fair Value (1) (2) Weighted Average Remaining Contractual Term (years) Outstanding at December 31, 2010 7,390,191 $ 46.35 $ 18.06 Granted 2,252,457 26.23 10.55 Exercised — — — Cancelled (897,999 ) 42.67 16.67 Outstanding at December 31, 2011 8,744,649 38.15 16.48 7.3 Exercisable at December 31, 2011 1,780,770 43.69 19.53 5.4 Outstanding at December 31, 2011 8,744,649 38.15 16.48 Granted 8,173,944 8.44 3.50 Exercised — — — Cancelled (8,440,445 ) 31.08 16.36 Outstanding at December 31, 2012 8,478,148 10.51 3.51 9.4 Vested and expected to vest at December 31, 2012 6,283,159 10.54 3.57 9.4 Exercisable at December 31, 2012 1,395,374 10.65 3.80 9.0 (1) Adjusted for the February 2012 1.742 -for- one stock split. (2) Represents the weighted-average grant date fair value per option, using the Monte Carlo simulation option-pricing model for performance-based options, and the Black-Scholes option-pricing model for time-based options. 2012 2011 2010 Expected volatility 55.8 % 65.8 % 71.4 % Expected dividend yield —% —% —% Expected term (in years) 4.9 4.8 6.6 Risk-free interest rate 0.9 % 1.1 % 2.4 % Weighted average fair value per share of options granted (1) $ 3.50 $ 10.55 $ 15.41 (1) Adjusted for the February 2012 1.742 -for- one stock split. Award of Restricted Common Stock In December 2012 , the Human Resources Committee of our Board of Directors granted an award of 50,000 shares of restricted common stock to an executive officer of the Company. The restricted common stock will vest 50% annually on each of the first and second anniversaries of the grant date. The 50,000 shares of restricted common stock were issued under the Company's 2012 Incentive Plan and are outstanding as of December 31, 2012 . Savings and Retirement Plans We maintain a defined contribution savings and retirement plan, which, among other things, allows pre-tax and after-tax contributions to be made by employees to the plan. Under the plan, participating employees may elect to contribute up to 50% of their eligible earnings, subject to IRS rules and regulations. Prior to February 2009 , the Company matched 50% of the first six percent of employees’ contributions. In February 2009 , Caesars Entertainment announced the suspension of the employer match for all participating employees, where allowed by law or not in violation of an existing agreement. The Acquisition was a change in control under the savings and retirement plan, and, therefore, all unvested Company match as of the Acquisition became vested. Amounts contributed to the plan are invested, at the participant’s direction, in up to 19 separate funds. Participants become vested in the matching contribution over five years of credited service. Our contribution expense for this plan was $10.0 million , $38,000 , and $0.1 million , respectively, for the years ended December 31, 2012 , 2011 , and 2010 . A modified matching program with a $600 annual cap per participant was approved by the Human Resources Committee in November 2011 and was reinstated beginning in April 2012 . Pro-rated matching for 2012 has a $450 cap per participant. We maintain several supplemental executive retirement plans ("SERP") to provide additional retirement benefits to a select group of former executives. The total liability included in deferred credits and other for the SERP plans at December 31, 2012 and 2011 was $ 32.0 million and $ 20.7 million , respectively. In 2012 , the Company recorded $13.0 million in expense to adjust its December 31, 2012 liabilities. Deferred Compensation Plans The Company has one active deferred compensation plan, the Executive Supplemental Savings Plan II (“ESSP II”); although, there are five other plans that contain deferred compensation assets: Harrah's Executive Deferred Compensation Plan (“EDCP”), the Harrah's Executive Supplemental Savings Plan (“ESSP”), Harrah's Deferred Compensation Plan (“HDCP”), the Restated Park Place Entertainment Corporation Executive Deferred Compensation Plan, and the Caesars World, Inc. Executive Security Plan. The deferred compensation plans are collectively referred to as “DCP.” Amounts deposited into DCP are unsecured liabilities of the Company. The EDCP and HDCP earn interest at rates approved by the Human Resources Committee of the Board of Directors. The other plans, including the ESSP II, are variable investment plans, which allow employees to direct their investments by choosing from several investment alternatives. In connection with the 2005 acquisition of Caesars Entertainment, Inc., we assumed the outstanding liability for Caesars Entertainment, Inc.’s deferred compensation plan; however, the balance was frozen and former Caesars employees may no longer contribute to that plan. The total liability included in deferred credits and other for DCP at December 31, 2012 and 2011 was $82.8 million and $85.2 million , respectively. In connection with the administration of several of these plans, we have invested in mutual funds and purchased company-owned life insurance policies insuring the lives of certain directors, officers, and key employees. Beginning in 2005 , we implemented the ESSP II for certain executive officers, directors, and other key employees of the Company to replace the ESSP. Eligible employees may elect to defer a percentage of their salary and/or bonus under ESSP II. Prior to February 2009 , the Company had the option to make matching contributions with respect to deferrals of salary to those participants who are eligible to receive matching contributions under the Company’s 40l(k) plan. In February 2009 , the Company eliminated matching contributions with respect to deferrals of salary. Employees immediately vest in their own deferrals of salary and bonus and vest in Company funded matching and discretionary contributions over five years. The Acquisition was a change in control under our deferred compensation plans, and, therefore, all unvested Company match as of the Acquisition became vested. The change in control also required that the pre-existing trust and escrow funds related to our deferred compensation plans be fully funded. Subsequent to the Acquisition, contributions by the Company have been segregated in order to differentiate between the fully-funded trusts and escrows prior to the Acquisition and the post-acquisition contributions. In January 2010 , the Company funded $5.6 million into the trust in order to increase the security of the participants’ deferred compensation plan benefits. 101 Multiemployer Pension Plan The Company contributes to a number of multiemployer defined benefit pension plans under the terms of collective-bargaining agreements that cover its union-represented employees. The risks of participating in these multiemployer plans are different from a single-employer plan in the following aspects: The Company's participation in these plans for the annual period ended December 31, 2012 , is outlined in the table below. The “EIN/Pension Plan Number” column provides the Employer Identification Number ("EIN") and the three -digit plan number, if applicable. Unless otherwise noted, the most recent Pension Protection Act ("PPA") zone status available in 2012 and 2011 is for the plan years beginning January 1, 2012 , and January 1, 2011 , respectively. The zone status is based on information that the Company received from the plan 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 less than 80% funded, and plans in the green zone are at least 80% funded. All plans detailed in the table below utilized extended amortization provisions to calculate zone status. The “FIP/RP Status Pending/Implemented” column indicates plans for which a financial improvement plan ("FIP") or a rehabilitation plan ("RP") is either pending or has been implemented. The last column lists the expiration date(s) of the collective-bargaining agreement(s) to which the plans are subject. ____________________ 102 a. Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers. b. If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. c. If the Company chooses to stop participating in some of its multiemployer plans, the Company may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability. Pension Protection Act Zone Status Contributions (Dollars in millions) Pension Fund EIN/Pension Plan Number 2012 2011 FIP/RP Status Pending/Implemented 2012 2011 2010 Surcharge Imposed Expiration Date of Collective-Bargaining Agreement Southern Nevada Culinary and Bartenders Pension Plan 88-6016617/001 Green Green No $ 18.7 $ 16.3 $ 14.6 No Various up to July 2013 Pension Plan of the UNITE HERE National Retirement Fund 13-6130178/001 Red Red Yes 13.8 12.8 12.3 No December 2015 Western Conference of Teamsters Pension Plan 91-6145047/001 Green Green No 4.9 4.7 4.1 No Various up to March 2016 Nevada Resort Association IATSE Local 720 Retirement Plan 51-0144767/001 Green Green No 0.7 1.0 0.8 No contracts have expired and are currently being negotiated Central Pension Fund of the IUOE & Participating Employers (1) 36-6052390/001 Green Green No 5.0 5.6 5.7 No Various up to May 2015 Local 68 Engineers Union Pension Plan (2) 51-0176618/001 Green Green No 1.5 1.6 1.7 No December 2015 NJ Carpenters Pension Fund 22-6174423/001 Yellow Yellow Yes 0.4 0.4 0.3 No December 2015 Southwest Carpenters Pension Trust 95-6042875/001 Green Green No 0.6 0.6 0.6 No contracts have expired and are currently being negotiated Other Funds 1.3 1.8 1.6 Total Contributions $ 46.9 $ 44.8 $ 41.7 (1) Plan years begin 2/1/12 and 2/1/11 . (2) Plan years begin 7/1/12 and 7/1/11 . The Company was listed in its plans' Forms 5500 as providing more than 5% of the total contributions for the following plans and plan years: At the date these financial statements were issued, Forms 5500 were not available for the plan year ending in 2012 . Pension Commitments With the acquisition of London Clubs in December 2006 , we assumed a defined benefit plan, which provides benefits based on final pensionable salary. 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. The most recent actuarial valuation of the plan showed a deficit of approximately $64.7 million , which is recognized as a liability in our Consolidated Balance Sheet at December 31, 2012 . As discussed within Note 15 , " Litigation, Contractual Commitments and Contingent Liabilities ,” with our acquisition of Caesars Entertainment, Inc., we assumed certain obligations related to the Employee Benefits and Other Employment Matters Allocation Agreement by and between Hilton Worldwide, Inc. (formerly Hilton Hotels Corporation) and Caesars Entertainment, Inc. dated December 31, 1998 , pursuant to which we shall retain or assume, as applicable, all liabilities and excess assets, if any, related to the Hilton Hotels Retirement Plan based on the ratio of accrued benefits of Hilton employees and the Company’s employees covered under the plan. Based on this ratio, our share of any benefit or obligation would be approximately 30% of the total. The Hilton Hotels Retirement Plan is a defined benefit plan that provides benefits based on years of service and compensation, as defined. Since December 31, 1996 , employees have not accrued additional benefits under this plan. The plan is administered by Hilton Worldwide, Inc. Hilton Worldwide, Inc. has informed the Company that, as of December 31, 2012 , the plan benefit obligations exceeded the fair value of the plan assets by $103.6 million , of which $32.9 million is our share. We did not make contributions to the plan in 2012 . Note 19—Non-consolidated Affiliates Our non-consolidated affiliates are accounted for under the equity method and, as of December 31, 2012 , our investments in and advances to non-consolidated affiliates consists primarily of a venture in a hotel at our combination thoroughbred racetrack and casino in Bossier City, Louisiana, a restaurant located inside the Flamingo Hotel and Casino in Las Vegas, Nevada, Suffolk Downs, and our investment in Rock Ohio Caesars LLC ("R OC") in Ohio. We manage ROC's Horseshoe Cleveland casino for a fee under a management agreement that expires in May 2032. Note 20—Related Party Transactions In connection with the Acquisition, the Sponsors entered into a services agreement with Caesars Entertainment relating to the provision of financial and strategic advisory services and consulting services. In addition, we pay a monitoring fee for management services and advice. Fees paid to the Sponsors, which are included in corporate expense in our Consolidated Statements of Comprehensive Loss, for the years ended December 31, 2012 , 2011 , and 2010 were $30.0 million , $30.0 million , and $28.5 million , respectively. We also reimburse the Sponsors for expenses that they incur related to their management services. We may engage in transactions with companies owned or controlled by affiliates of our Sponsors in the normal course of business. We believe such transactions are conducted at fair value. 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. 103 Pension Fund Year Contributions to Plan Exceeded More Than 5% of Total Contributions (as of December 31 of the Plan's Year End) Pension Plan of the UNITE HERE National Retirement Fund 2011 and 2010 Southern Nevada Culinary and Bartenders Pension Plan 2011 and 2010 Local 68 Engineers Union Pension Plan 2011 and 2010 Nevada Resort Association IATSE Local 720 Retirement Plan 2011 and 2010 Note 21 — Subsequent Events CEOC Financing Transactions In January and February 2013, CEOC converted $267.8 million aggregate principal amount of original maturity revolver commitments held by consenting lenders to Term B-6 Loans, repaid $133.9 million principal amount of term loans of extending lenders, terminated $267.8 million principal amount of revolving commitments of extending lenders, and increased the amount of outstanding Term B-6 Loans by $133.9 million . In February 2013 , CEOC completed the offering of $1,500.0 million aggregate principal amount of 9% senior secured notes due 2020 (the " February 2013 notes"), the proceeds of which were placed into escrow. Upon release from escrow, we plan to use the net proceeds of the February 2013 notes offering to repay a portion of CEOC's existing term loans at par, with such repayment being applied: first, to all outstanding B-1 , B-2 , and B-3 term loans held by consenting lenders; second, to B-5 and B-6 term loans held by consenting lenders, in an amount up to 20% of the principal amount of the B-5 and B-6 term loans; and third, if any proceeds remain outstanding, to outstanding term loans as CEOC elects in its discretion, and to pay related fees and expenses. In connection with the February 2013 notes offering, CEOC received the requisite lenders’ consents and entered into a bank amendment to its Credit Facilities to, among other things: (i) use the net cash proceeds of February 2013 notes offering to repay a portion of CEOC’s existing term loans as described above; (ii) obtain up to $75.0 million of extended revolving facility commitments with a maturity of January 28, 2017 , (iii) increase the accordion capacity under the Credit Facilities by an additional $650.0 million (which may be used, among other things, to establish extended revolving facility commitments under the Credit Facilities); (iv) modify the calculation of the senior secured leverage ratio for purposes of the maintenance test under the Credit Facilities to exclude the February 2013 notes; and (v) modify certain other provisions of the Credit Facilities. The effectiveness of this proposed bank amendment and related transactions are subject to regulatory approval and other conditions. On February 20, 2013 , the escrow conditions restricting our use of proceeds from the December 2012 issuance of the $750.0 million aggregate principal amount of 9% senior secured notes due 2020 were satisfied. CMBS Financing Transactions In February 2013 , we exercised the option to extend the maturity of the CMBS Financing to 2014 . The loan contains an additional extension option to extend its maturity from 2014 to 2015 , subject to certain conditions. As part of the extension, we entered into a new interest rate cap agreement. The interest rate cap agreement, which is effective from February 13, 2013 and terminates February 13, 2015 , is for a notional amount of $4,664.1 million at a LIBOR cap rate of 4.5% . Any future changes in fair value of the interest rate cap will be recognized in interest expense during the period in which the changes in value occur. 104 Note 22— Condensed Consolidating Financial Information of Guarantors and Issuers CEOC is the issuer of certain registered debt securities, a portion of which is guaranteed by Caesars Entertainment ("Parent-Only Guaranteed Debt") and a portion of which is guaranteed by both Caesars Entertainment and certain wholly-owned subsidiaries of CEOC ("Parent and Subsidiary Guaranteed Debt") as further discussed in Note 8 , " Debt ." The table below presents the condensed consolidating financial information relevant to these two guarantee structures as of December 31, 2012 , and December 31, 2011 . The CEC (parent guarantor), subsidiary issuer, and subsidiary non-guarantors of parent-only guaranteed debt columns represent the information related to the Parent-Only Guaranteed Debt structure. The CEC (parent guarantor), subsidiary issuer, subsidiary guarantors of parent and subsidiary guaranteed debt, and subsidiary non-guarantors of parent and subsidiary guaranteed debt columns represent the information related to the Parent and Subsidiary Guaranteed Debt structure. In lieu of providing separate unaudited financial statements for the guarantor subsidiaries, we have included the accompanying condensed consolidating financial statements based on Rule 3-10 of the SEC's Regulation S-X. Management does not believe that separate financial statements of the guarantor subsidiaries are material to our investors; therefore, separate financial statements and other disclosures concerning the guarantor subsidiaries are not presented. In 2009, one of our non-guarantor subsidiaries invested in debt instruments that were issued by our subsidiary issuer. These marketable securities are deemed to be available-for-sale securities and are to be reported in the non-guarantor's financial statements at fair value as of each reporting period, with unrealized gains and losses for each reporting period to be recorded as a component of stockholders' equity. The mark-to-market adjustments for these securities were not properly reflected in this footnote in our filings since the date the securities were acquired. At December 31, 2012, these marketable securities have been properly reflected in the condensed consolidating financial statements herein. This revision resulted in decreases in Investment in subsidiaries, Intercompany receivables, Deferred income tax liabilities, and Total Caesars stockholders' equity/(deficit) in the Non-Guarantor column and corresponding increases in the Consolidating/ Eliminating Adjustments column, of this footnote. The mark-to-market accounting for these securities and the error, which the Company has determined is not material to this disclosure, are eliminated upon consolidation and, therefore, have no impact on the Company's consolidated financial condition, results of operations, or cash flows. In 2009, on a consolidated basis, we recognized cancellation of indebtedness ("COD") related to our non-guarantor subsidiary investment in debt instruments that were issued by our subsidiary issuer. In connection with this COD income, we reversed a deferred tax liability at our subsidiary issuer. We have determined that on a subsidiary issuer “stand-alone” basis, a COD recognition event did not occur and the deferred tax liability should not have been reversed. At December 31, 2012, this deferred tax liability was restored to the subsidiary issuer resulting in an increase to Deferred income tax liabilities, and a decrease to Total Caesars stockholder's equity/(deficit) in the Subsidiary Issuer column with offsetting changes in the Consolidating/Eliminating Adjustments column, of this footnote. The deferred tax restoration, which the Company has determined is not material to this disclosure, is eliminated in consolidation and, therefore, has no impact on the Company's consolidated financial condition, results of operations, or cash flows. 105 CAESARS ENTERTAINMENT CORPORATION CONDENSED CONSOLIDATING BALANCE SHEET DECEMBER 31, 2012 (In millions) 106 CEC (Parent Guarantor) Subsidiary Issuer Subsidiary Guarantors of Parent and Subsidiary Guaranteed Debt (a) Subsidiary Non-Guarantors of Parent and Subsidiary Guaranteed Debt (b) Subsidiary Non-Guarantors of Parent-Only Guaranteed Debt (a) + (b) Consolidating/ Eliminating Adjustments Total Assets Current assets Cash and cash equivalents $ 7.4 $ 911.9 $ 353.8 $ 484.4 $ 838.2 $ — $ 1,757.5 Restricted cash — — — 833.6 833.6 — 833.6 Receivables, less allowance for doubtful accounts 0.1 19.5 348.0 212.9 560.9 — 580.5 Deferred income taxes — 17.4 75.7 21.8 97.5 — 114.9 Prepayments and other current assets 5.0 8.3 66.8 69.9 136.7 — 150.0 Inventories — 0.3 31.7 20.0 51.7 — 52.0 Intercompany receivables 29.6 295.5 136.8 97.2 234.0 (559.1 ) — Assets held for sale — — — 5.1 5.1 — 5.1 Total current assets 42.1 1,252.9 1,012.8 1,744.9 2,757.7 (559.1 ) 3,493.6 Property and equipment, net of accumulated depreciation — 189.9 8,534.6 6,977.2 15,511.8 — 15,701.7 Goodwill — — 1,331.0 1,829.3 3,160.3 — 3,160.3 Intangible assets other than goodwill — 4.2 3,183.0 798.5 3,981.5 — 3,985.7 Investments in subsidiaries — 11,669.6 920.3 790.7 1,711.0 (13,380.6 ) — Investments in and advances to non-consolidated affiliates — — 3.0 97.4 100.4 — 100.4 Restricted cash — — — 364.6 364.6 — 364.6 Deferred charges and other 7.5 298.4 184.8 236.6 421.4 (6.7 ) 720.6 Intercompany receivables 563.1 1,089.6 585.9 153.8 739.7 (2,392.4 ) — Assets held for sale — — — 471.2 471.2 — 471.2 $ 612.7 $ 14,504.6 $ 15,755.4 $ 13,464.2 $ 29,219.6 $ (16,338.8 ) $ 27,998.1 Liabilities and Stockholders’ (Deficit)/Equity Current liabilities Accounts payable $ 3.9 $ 75.9 $ 156.5 $ 139.9 $ 296.4 $ — $ 376.2 Interest payable — 176.0 0.4 57.3 57.7 — 233.7 Accrued expenses 3.7 164.7 434.7 491.6 926.3 — 1,094.7 Current portion of long-term debt — 126.2 10.7 743.0 753.7 — 879.9 Intercompany payables 15.9 88.1 284.8 170.3 455.1 (559.1 ) — Liabilities held for sale — — — 3.8 3.8 — 3.8 Total current liabilities 23.5 630.9 887.1 1,605.9 2,493.0 (559.1 ) 2,588.3 Long-term debt — 15,257.0 64.8 6,122.9 6,187.7 (912.5 ) 20,532.2 Accumulated losses of subsidiaries in excess of investment 925.4 — — — — (925.4 ) — Deferred credits and other 4.1 535.0 160.2 123.7 283.9 — 823.0 Deferred income taxes — 422.6 2,188.9 1,714.7 3,903.6 7.9 4,334.1 Intercompany payables 55.0 614.5 871.7 851.2 1,722.9 (2,392.4 ) — Liabilities held for sale — — — 52.1 52.1 — 52.1 1,008.0 17,460.0 4,172.7 10,470.5 14,643.2 (4,781.5 ) 28,329.7 Total Caesars stockholders’ (deficit)/equity (395.3 ) (2,955.4 ) 11,582.7 2,913.6 14,496.3 (11,557.3 ) (411.7 ) Non-controlling interests — — — 80.1 80.1 — 80.1 Total (deficit)/equity (395.3 ) (2,955.4 ) 11,582.7 2,993.7 14,576.4 (11,557.3 ) (331.6 ) $ 612.7 $ 14,504.6 $ 15,755.4 $ 13,464.2 $ 29,219.6 $ (16,338.8 ) $ 27,998.1 CAESARS ENTERTAINMENT CORPORATION CONDENSED CONSOLIDATING BALANCE SHEET DECEMBER 31, 2011 (In millions) 107 CEC (Parent Guarantor) Subsidiary Issuer Subsidiary Guarantors of Parent and Subsidiary Guaranteed Debt (a) Subsidiary Non-Guarantors of Parent and Subsidiary Guaranteed Debt (b) Subsidiary Non-Guarantors of Parent-Only Guaranteed Debt (a) + (b) Consolidating/ Eliminating Adjustments Total Assets Current assets Cash and cash equivalents $ 3.9 $ 16.6 $ 372.5 $ 498.2 $ 870.7 $ — $ 891.2 Restricted cash — — — 66.6 66.6 — 66.6 Receivables, less allowance for doubtful accounts — 38.0 314.7 135.7 450.4 — 488.4 Deferred income taxes — 37.9 117.7 14.9 132.6 — 170.5 Prepayments and other current assets — 8.4 76.2 75.8 152.0 — 160.4 Inventories — 0.4 27.9 16.3 44.2 — 44.6 Intercompany receivables 15.7 237.7 135.6 108.7 244.3 (497.7 ) — Assets held for sale — — 11.6 3.9 15.5 — 15.5 Total current assets 19.6 339.0 1,056.2 920.1 1,976.3 (497.7 ) 1,837.2 Property and equipment, net of accumulated depreciation — 205.6 9,499.8 6,780.2 16,280.0 — 16,485.6 Goodwill — — 1,526.2 1,834.2 3,360.4 — 3,360.4 Intangible assets other than goodwill — 4.9 3,524.2 834.1 4,358.3 — 4,363.2 Investments in subsidiaries 535.8 13,568.0 886.8 882.9 1,769.7 (15,873.5 ) — Investments in and advances to non-consolidated affiliates — — 4.2 90.0 94.2 — 94.2 Restricted cash — — — 451.1 451.1 — 451.1 Deferred charges and other 5.0 324.9 182.9 233.4 416.3 — 746.2 Intercompany receivables 469.0 1,102.8 586.0 98.7 684.7 (2,256.5 ) — Assets held for sale — — 593.4 584.3 1,177.7 — 1,177.7 $ 1,029.4 $ 15,545.2 $ 17,859.7 $ 12,709.0 $ 30,568.7 $ (18,627.7 ) $ 28,515.6 Liabilities and Stockholders’ Equity/(Deficit) Current liabilities Accounts payable $ 0.2 $ 99.3 $ 102.2 $ 88.4 $ 190.6 $ — $ 290.1 Interest payable — 174.0 0.8 16.6 17.4 — 191.4 Accrued expenses 7.5 136.3 463.4 460.2 923.6 — 1,067.4 Current portion of long-term debt — 20.2 7.0 13.2 20.2 — 40.4 Intercompany payables 15.0 67.9 264.8 150.0 414.8 (497.7 ) — Liabilities held for sale — — 10.1 3.4 13.5 — 13.5 Total current liabilities 22.7 497.7 848.3 731.8 1,580.1 (497.7 ) 1,602.8 Long-term debt — 14,446.3 69.8 6,100.7 6,170.5 (857.3 ) 19,759.5 Deferred credits and other — 612.5 166.0 123.2 289.2 — 901.7 Deferred income taxes — 647.7 2,558.8 1,925.4 4,484.2 — 5,131.9 Intercompany payables — 420.2 871.7 964.6 1,836.3 (2,256.5 ) — Liabilities held for sale — — — 66.3 66.3 — 66.3 22.7 16,624.4 4,514.6 9,912.0 14,426.6 (3,611.5 ) 27,462.2 Total Caesars stockholders’ equity/(deficit) 1,006.7 (1,079.2 ) 13,345.1 2,750.3 16,095.4 (15,016.2 ) 1,006.7 Non-controlling interests — — — 46.7 46.7 — 46.7 Total equity/(deficit) 1,006.7 (1,079.2 ) 13,345.1 2,797.0 16,142.1 (15,016.2 ) 1,053.4 $ 1,029.4 $ 15,545.2 $ 17,859.7 $ 12,709.0 $ 30,568.7 $ (18,627.7 ) $ 28,515.6 CAESARS ENTERTAINMENT CORPORATION CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) FOR THE YEAR ENDED DECEMBER 31, 2012 (In millions) CEC (Parent Guarantor) Subsidiary Issuer Subsidiary Guarantors of Parent and Subsidiary Guaranteed Debt (a) Subsidiary Non-Guarantors of Parent and Subsidiary Guaranteed Debt (b) Subsidiary Non-Guarantors of Parent-Only Guaranteed Debt (a) + (b) Consolidating/ Eliminating Adjustments Total Revenues Casino $ — $ 53.9 $ 3,875.5 $ 2,317.5 $ 6,193.0 $ — $ 6,246.9 Food and beverage — 12.5 812.8 684.8 1,497.6 — 1,510.1 Rooms — 17.8 626.3 561.4 1,187.7 — 1,205.5 Management fees — 3.9 56.2 11.6 67.8 (24.4 ) 47.3 Other — 54.0 375.5 580.3 955.8 (180.4 ) 829.4 Less: casino promotional allowances — (19.0 ) (744.3 ) (489.2 ) (1,233.5 ) — (1,252.5 ) Net revenues — 123.1 5,002.0 3,666.4 8,668.4 (204.8 ) 8,586.7 Operating expenses Direct Casino — 37.7 2,204.8 1,313.5 3,518.3 — 3,556.0 Food and beverage — 5.9 330.9 323.3 654.2 — 660.1 Rooms — 1.7 140.4 155.5 295.9 — 297.6 Property, general, administrative, and other — 23.5 1,165.8 1,073.2 2,239.0 (158.7 ) 2,103.8 Depreciation and amortization — 6.7 445.4 263.4 708.8 — 715.5 Write-downs, reserves, and project opening costs, net of recoveries 15.0 12.1 57.1 22.0 79.1 — 106.2 Intangible and tangible asset impairment charges — — 1,064.7 3.0 1,067.7 — 1,067.7 Loss on interests in non-consolidated affiliates — — 0.5 17.0 17.5 — 17.5 Loss/(income) on interests in subsidiaries 1,464.3 460.8 (6.6 ) — (6.6 ) (1,918.5 ) — Corporate expense 28.2 126.1 32.0 54.9 86.9 (46.2 ) 195.0 Acquisition and integration costs — 4.8 — 1.3 1.3 — 6.1 Amortization of intangible assets — 0.7 102.3 71.6 173.9 — 174.6 Total operating expenses 1,507.5 680.0 5,537.3 3,298.7 8,836.0 (2,123.4 ) 8,900.1 (Loss)/income from operations (1,507.5 ) (556.9 ) (535.3 ) 367.7 (167.6 ) 1,918.6 (313.4 ) Interest expense, net of interest capitalized (1.0 ) (1,934.2 ) (55.5 ) (337.6 ) (393.1 ) 227.0 (2,101.3 ) Gains on early extinguishments of debt — — — 136.0 136.0 — 136.0 Other income, including interest income 18.3 79.2 21.2 159.0 180.2 (252.2 ) 25.5 (Loss)/income from continuing operations before income taxes (1,490.2 ) (2,411.9 ) (569.6 ) 325.1 (244.5 ) 1,893.4 (2,253.2 ) Benefit/(provision) for income taxes 9.1 732.0 174.4 (88.5 ) 85.9 43.5 870.5 (Loss)/income from continuing operations, net of income taxes (1,481.1 ) (1,679.9 ) (395.2 ) 236.6 (158.6 ) 1,936.9 (1,382.7 ) Discontinued operations Income/(loss) from discontinued operations — — 62.1 (121.5 ) (59.4 ) — (59.4 ) (Provision)/benefit for income taxes — — (29.1 ) 13.7 (15.4 ) (34.7 ) (50.1 ) Income/(loss) from discontinued operations, net of income taxes — — 33.0 (107.8 ) (74.8 ) (34.7 ) (109.5 ) Net (loss)/income (1,481.1 ) (1,679.9 ) (362.2 ) 128.8 (233.4 ) 1,902.2 (1,492.2 ) Less: net income attributable to non-controlling interests — — — (5.3 ) (5.3 ) — (5.3 ) Net (loss)/income attributable to Caesars (1,481.1 ) (1,679.9 ) (362.2 ) 123.5 (238.7 ) 1,902.2 (1,497.5 ) Other comprehensive income/(loss), net of income taxes: Total other comprehensive (loss)/income, net of income taxes — (25.0 ) — (45.0 ) (45.0 ) 96.6 26.6 Less: foreign currency translation adjustments attributable to non-controlling interests, net of income taxes — — — (1.1 ) (1.1 ) — (1.1 ) Comprehensive (loss)/income attributable to Caesars 108 $ (1,481.1 ) $ (1,704.9 ) $ (362.2 ) $ 77.4 $ (284.8 ) $ 1,998.8 $ (1,472.0 ) CAESARS ENTERTAINMENT CORPORATION CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) FOR THE YEAR ENDED DECEMBER 31, 2011 (In millions) CEC (Parent Guarantor) Subsidiary Issuer Subsidiary Guarantors of Parent and Subsidiary Guaranteed Debt (a) Subsidiary Non-Guarantors of Parent and Subsidiary Guaranteed Debt (b) Subsidiary Non-Guarantors of Parent-Only Guaranteed Debt (a) + (b) Consolidating/ Eliminating Adjustments Total Revenues Casino $ — $ 62.6 $ 3,952.2 $ 2,379.7 $ 6,331.9 $ — $ 6,394.5 Food and beverage — 14.2 820.7 673.5 1,494.2 — 1,508.4 Rooms — 16.7 605.8 570.6 1,176.4 — 1,193.1 Management fees — — 66.1 3.0 69.1 (33.3 ) 35.8 Other — 46.5 380.0 393.1 773.1 (145.5 ) 674.1 Less: casino promotional allowances — (19.0 ) (725.6 ) (488.0 ) (1,213.6 ) — (1,232.6 ) Net revenues — 121.0 5,099.2 3,531.9 8,631.1 (178.8 ) 8,573.3 Operating expenses Direct Casino — 40.9 2,243.8 1,333.4 3,577.2 — 3,618.1 Food and beverage — 6.7 337.8 314.9 652.7 — 659.4 Rooms — 2.0 133.3 150.9 284.2 — 286.2 Property, general, administrative, and other — 54.2 1,235.7 937.5 2,173.2 (140.5 ) 2,086.9 Depreciation and amortization — 6.8 427.5 243.8 671.3 — 678.1 Write-downs, reserves, and project opening costs, net of recoveries — 46.6 24.6 2.6 27.2 — 73.8 Intangible and tangible asset impairment charges — — 11.0 21.8 32.8 — 32.8 Loss on interests in non-consolidated affiliates — — 1.8 6.1 7.9 — 7.9 Loss/(income) on interests in subsidiaries 693.4 (421.9 ) (44.7 ) — (44.7 ) (226.8 ) — Corporate expense 22.7 98.4 22.3 47.7 70.0 (38.3 ) 152.8 Acquisition and integration costs 0.1 1.0 1.1 2.1 3.2 — 4.3 Amortization of intangible assets — 0.7 93.6 62.4 156.0 — 156.7 Total operating expenses 716.2 (164.6 ) 4,487.8 3,123.2 7,611.0 (405.6 ) 7,757.0 (Loss)/income from operations (716.2 ) 285.6 611.4 408.7 1,020.1 226.8 816.3 Interest expense, net of interest capitalized — (1,953.3 ) (50.2 ) (328.6 ) (378.8 ) 209.8 (2,122.3 ) Gains on early extinguishments of debt — — — 47.9 47.9 — 47.9 Other income, including interest income 25.5 70.7 17.6 134.2 151.8 (222.7 ) 25.3 (Loss)/income from continuing operations before income taxes (690.7 ) (1,597.0 ) 578.8 262.2 841.0 213.9 (1,232.8 ) Benefit/(provision) for income taxes 3.1 776.8 (215.3 ) (46.0 ) (261.3 ) 16.1 534.7 (Loss)/income from continuing operations, net of income taxes (687.6 ) (820.2 ) 363.5 216.2 579.7 230.0 (698.1 ) Discontinued operations Income/(loss) from discontinued operations — — 75.3 (16.1 ) 59.2 — 59.2 (Provision)/benefit for income taxes — — (13.4 ) 1.7 (11.7 ) (16.1 ) (27.8 ) Income/(loss) from discontinued operations, net of income taxes — — 61.9 (14.4 ) 47.5 (16.1 ) 31.4 Net (loss)/income (687.6 ) (820.2 ) 425.4 201.8 627.2 213.9 (666.7 ) Less: net income attributable to non-controlling interests — — — (20.9 ) (20.9 ) — (20.9 ) Net (loss)/income attributable to Caesars (687.6 ) (820.2 ) 425.4 180.9 606.3 213.9 (687.6 ) Other comprehensive income/(loss), net of income taxes: Total other comprehensive income/(loss), net of income taxes — 112.9 — (39.2 ) (39.2 ) — 73.7 Less: foreign currency translation adjustments attributable to non-controlling interests, net of income taxes — — — (1.3 ) (1.3 ) — (1.3 ) 109 Comprehensive (loss)/income attributable to Caesars $ (687.6 ) $ (707.3 ) $ 425.4 $ 140.4 $ 565.8 $ 213.9 $ (615.2 ) CAESARS ENTERTAINMENT CORPORATION CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) FOR THE YEAR ENDED DECEMBER 31, 2010 (In millions) CEC (Parent Guarantor) Subsidiary Issuer Subsidiary Guarantors of Parent and Subsidiary Guaranteed Debt (a) Subsidiary Non-Guarantors of Parent and Subsidiary Guaranteed Debt (b) Subsidiary Non-Guarantors of Parent-Only Guaranteed Debt (a) + (b) Consolidating/ Eliminating Adjustments Total Revenues Casino $ — $ 67.9 $ 4,241.5 $ 2,362.4 $ 6,603.9 $ — $ 6,671.8 Food and beverage — 18.6 823.6 639.9 1,463.5 — 1,482.1 Rooms — 17.8 577.0 522.9 1,099.9 — 1,117.7 Management fees — 2.6 61.1 1.5 62.6 (26.1 ) 39.1 Other — 47.2 354.6 332.9 687.5 (165.9 ) 568.8 Less: casino promotional allowances — (23.6 ) (807.8 ) (494.9 ) (1,302.7 ) — (1,326.3 ) Net revenues — 130.5 5,250.0 3,364.7 8,614.7 (192.0 ) 8,553.2 Operating expenses Direct Casino — 45.3 2,402.5 1,369.9 3,772.4 — 3,817.7 Food and beverage — 7.8 317.3 289.2 606.5 — 614.3 Rooms — 2.1 120.7 135.7 256.4 — 258.5 Property, general, administrative, and other — 52.7 1,261.6 856.2 2,117.8 (140.8 ) 2,029.7 Depreciation and amortization — 7.3 452.5 239.6 692.1 — 699.4 Write-downs, reserves, and project opening costs, net of recoveries — 27.9 90.8 31.0 121.8 — 149.7 Intangible and tangible asset impairment charges — — 178.0 6.0 184.0 — 184.0 Loss/(income) on interests in non-consolidated affiliates — — 2.1 (0.6 ) 1.5 — 1.5 Loss/(income) on interests in subsidiaries 816.5 (295.8 ) (33.0 ) — (33.0 ) (487.7 ) — Corporate expense 23.3 85.6 21.6 61.6 83.2 (51.2 ) 140.9 Acquisition and integration costs 0.8 1.9 4.4 6.5 10.9 — 13.6 Amortization of intangible assets — 0.7 97.9 62.2 160.1 — 160.8 Total operating expenses 840.6 (64.5 ) 4,916.4 3,057.3 7,973.7 (679.7 ) 8,070.1 (Loss)income from operations (840.6 ) 195.0 333.6 307.4 641.0 487.7 483.1 Interest expense, net of interest capitalized (3.1 ) (1,712.2 ) (96.5 ) (392.6 ) (489.1 ) 222.8 (1,981.6 ) (Losses)/gains on early extinguishments of debt — (4.7 ) — 120.3 120.3 — 115.6 Other income, including interest income 4.5 93.3 59.8 106.2 166.0 (222.8 ) 41.0 (Loss)/income from continuing operations before income taxes (839.2 ) (1,428.6 ) 296.9 141.3 438.2 487.7 (1,341.9 ) Benefit/(provision) for income taxes 8.1 642.2 (119.7 ) (52.2 ) (171.9 ) 14.1 492.5 (Loss)/income from continuing operations, net of income taxes (831.1 ) (786.4 ) 177.2 89.1 266.3 501.8 (849.4 ) Discontinued operations Income/(loss) from discontinued operations — — 65.6 (15.7 ) 49.9 — 49.9 (Provision)/benefit for income taxes — — (11.8 ) 2.1 (9.7 ) (14.1 ) (23.8 ) Income/(loss) from discontinued operations, net of income taxes — — 53.8 (13.6 ) 40.2 (14.1 ) 26.1 Net (loss)/income (831.1 ) (786.4 ) 231.0 75.5 306.5 487.7 (823.3 ) Less: net income attributable to non-controlling interests — — — (7.8 ) (7.8 ) — (7.8 ) Net (loss)/income attributable to Caesars (831.1 ) (786.4 ) 231.0 67.7 298.7 487.7 (831.1 ) Other comprehensive income/(loss), net of income taxes: Total other comprehensive (loss)/income, net of income taxes — (77.4 ) — 38.4 38.4 — (39.0 ) Less: foreign currency translation adjustments attributable to non-controlling interests, net of income taxes — — — 4.2 4.2 — 4.2 Comprehensive (loss)/income attributable to Caesars 110 $ (831.1 ) $ (863.8 ) $ 231.0 $ 110.3 $ 341.3 $ 487.7 $ (865.9 ) CAESARS ENTERTAINMENT CORPORATION CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2012 (In millions) 111 CEC (Parent Guarantor) Subsidiary Issuer Subsidiary Guarantors of Parent and Subsidiary Guaranteed Debt (a) Subsidiary Non-Guarantors of Parent and Subsidiary Guaranteed Debt (b) Subsidiary Non-Guarantors of Parent-Only Guaranteed Debt (a) + (b) Consolidating/ Eliminating Adjustments Total Cash flows from operating activities $ 258.6 $ 94.6 $ (505.1 ) $ 141.2 $ (363.9 ) $ 37.2 $ 26.5 Cash flows from investing activities Acquisitions of property and equipment, net of change in related payables — (9.6 ) (205.3 ) (292.8 ) (498.1 ) — (507.7 ) Change in restricted cash — — — (680.5 ) (680.5 ) — (680.5 ) Return of investment in subsidiary — — 92.5 — 92.5 (92.5 ) — Payments to acquire businesses, net of transaction costs and cash acquired — — — (37.9 ) (37.9 ) — (37.9 ) Investments in non-consolidated affiliates and other — — — (28.1 ) (28.1 ) — (28.1 ) Purchase of additional interests in subsidiaries (232.5 ) (28.1 ) — — — 260.6 — Proceeds from the sale of a subsidiary — — — 42.4 42.4 — 42.4 Purchases of investment securities — — — (39.2 ) (39.2 ) — (39.2 ) Proceeds from the sale and maturity of investment securities — — — 31.6 31.6 — 31.6 Other (0.8 ) — (6.8 ) 2.1 (4.7 ) — (5.5 ) Cash flows used in investing activities (233.3 ) (37.7 ) (119.6 ) (1,002.4 ) (1,122.0 ) 168.1 (1,224.9 ) Cash flows from financing activities Proceeds from the issuance of long-term debt — 432.2 — 3,277.2 3,277.2 — 3,709.4 Assumption of debt issued by non-guarantors — 1,981.3 — (1,981.3 ) (1,981.3 ) — — Debt issuance costs and fees — (38.9 ) — (11.7 ) (11.7 ) — (50.6 ) Borrowings under lending agreements — 453.0 — — — — 453.0 Repayments under lending agreements — (608.0 ) — — — — (608.0 ) Cash paid for early extinguishments of debt — (1,574.3 ) — (462.3 ) (462.3 ) — (2,036.6 ) Scheduled debt retirements — (14.4 ) (1.4 ) — (1.4 ) — (15.8 ) Purchase of additional interests in subsidiary — — (9.6 ) — (9.6 ) — (9.6 ) Proceeds from sale of additional interest in a subsidiary — — — 32.2 32.2 — 32.2 Issuance of common stock, net of fees 17.4 — — — — — 17.4 Other — — (10.8 ) (8.0 ) (18.8 ) — (18.8 ) Transfer (to)/from affiliates (39.2 ) 207.5 — 2.3 2.3 (170.6 ) — Cash flows provided by financing activities (21.8 ) 838.4 (21.8 ) 848.4 826.6 (170.6 ) 1,472.6 Cash flows from discontinued operations Cash flows from operating activities — — 17.5 0.3 17.8 (34.7 ) (16.9 ) Cash flows from investing activities — — 600.3 — 600.3 — 600.3 Cash flows from financing activities — — — — — — — Net cash provided by discontinued operations — — 617.8 0.3 618.1 (34.7 ) 583.4 Net increase/(decrease) in cash and cash equivalents 3.5 895.3 (28.7 ) (12.5 ) (41.2 ) — 857.6 Change in cash classified as assets held for sale — — 10.0 (1.3 ) 8.7 — 8.7 Cash and cash equivalents, beginning of period 3.9 16.6 372.5 498.2 870.7 — 891.2 Cash and cash equivalents, end of period $ 7.4 $ 911.9 $ 353.8 $ 484.4 $ 838.2 $ — $ 1,757.5 CAESARS ENTERTAINMENT CORPORATION CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2011 (In millions) 112 CEC (Parent Guarantor) Subsidiary Issuer Subsidiary Guarantors of Parent and Subsidiary Guaranteed Debt (a) Subsidiary Non-Guarantors of Parent and Subsidiary Guaranteed Debt (b) Subsidiary Non-Guarantors of Parent-Only Guaranteed Debt (a) + (b) Consolidating/ Eliminating Adjustments Total Cash flows from operating activities $ 182.9 $ (507.6 ) $ 72.7 $ 296.2 $ 368.9 $ 16.1 $ 60.3 Cash flows from investing activities Acquisitions of property and equipment, net of change in related payables — (12.3 ) (108.1 ) (152.1 ) (260.2 ) — (272.5 ) Change in restricted cash — — — (517.7 ) (517.7 ) — (517.7 ) Purchase of additional interest in subsidiary — — — (75.4 ) (75.4 ) — (75.4 ) Payments to acquire certain gaming rights — — — (22.7 ) (22.7 ) — (22.7 ) Payments to acquire businesses, net of transaction costs and cash acquired (123.5 ) (136.7 ) (49.1 ) (19.0 ) (68.1 ) 309.3 (19.0 ) (Investments in)/advances to non-consolidated affiliates and other — — — (76.0 ) (76.0 ) — (76.0 ) Purchases of investment securities — — — (35.7 ) (35.7 ) — (35.7 ) Proceeds from the sale and maturity of investment securities — — — 22.6 22.6 — 22.6 Other — — (3.8 ) (6.1 ) (9.9 ) — (9.9 ) Cash flows used in investing activities (123.5 ) (149.0 ) (161.0 ) (882.1 ) (1,043.1 ) 309.3 (1,006.3 ) Cash flows from financing activities Proceeds from the issuance of long-term debt — 418.3 — 445.5 445.5 — 863.8 Debt issuance costs and fees — (3.2 ) — (14.9 ) (14.9 ) — (18.1 ) Borrowings under lending agreements — 358.0 — — — — 358.0 Repayments under lending agreements — (203.0 ) — — — — (203.0 ) Cash paid for early extinguishments of debt — — (2.6 ) (125.9 ) (128.5 ) — (128.5 ) Scheduled debt retirements — (25.2 ) — (18.5 ) (18.5 ) — (43.7 ) Other (1.7 ) — (8.1 ) (7.2 ) (15.3 ) — (17.0 ) Transfer (to)/from affiliates (189.8 ) 67.3 49.1 382.7 431.8 (309.3 ) — Cash flows provided by financing activities (191.5 ) 612.2 38.4 661.7 700.1 (309.3 ) 811.5 Cash flows from discontinued operations Cash flows from operating activities — — 79.4 (0.5 ) 78.9 (16.1 ) 62.8 Cash flows from investing activities — — (5.2 ) (5.5 ) (10.7 ) — (10.7 ) Cash flows from financing activities — — — — — — — Net cash provided by discontinued operations — — 74.2 (6.0 ) 68.2 (16.1 ) 52.1 Net (decrease)/increase in cash and cash equivalents (132.1 ) (44.4 ) 24.3 69.8 94.1 — (82.4 ) Change in cash classified as assets held for sale — — 3.5 (1.0 ) 2.5 — 2.5 Cash and cash equivalents, beginning of period 136.0 61.0 344.7 429.4 774.1 — 971.1 Cash and cash equivalents, end of period $ 3.9 $ 16.6 $ 372.5 $ 498.2 $ 870.7 $ — $ 891.2 CAESARS ENTERTAINMENT CORPORATION CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2010 (In millions) 113 CEC (Parent Guarantor) Subsidiary Issuer Subsidiary Guarantors of Parent and Subsidiary Guaranteed Debt (a) Subsidiary Non-Guarantors of Parent and Subsidiary Guaranteed Debt (b) Subsidiary Non-Guarantors of Parent-Only Guaranteed Debt (a) + (b) Consolidating/ Eliminating Adjustments Total Cash flows from operating activities $ 753.9 $ (516.6 ) $ (20.6 ) $ (126.4 ) $ (147.0 ) $ 14.1 $ 104.4 Cash flows from investing activities Acquisitions of property and equipment, net of change in related payables — (5.3 ) (92.1 ) (53.9 ) (146.0 ) — (151.3 ) Purchase of additional interest in subsidiary — — — (19.5 ) (19.5 ) — (19.5 ) Payments to acquire certain gaming rights — — — (16.5 ) (16.5 ) — (16.5 ) Payments to acquire businesses, net of transaction costs and cash acquired — (18.8 ) (2.1 ) (9.7 ) (11.8 ) — (30.6 ) (Investments in) non-consolidated affiliates and other — — (64.0 ) — (64.0 ) — (64.0 ) Purchases of investment securities — — — (25.8 ) (25.8 ) — (25.8 ) Proceeds from the sale and maturity of investment securities — — — 14.8 14.8 — 14.8 Other — — 8.6 557.1 565.7 (551.3 ) 14.4 Cash flows used in investing activities — (24.1 ) (149.6 ) 446.5 296.9 (551.3 ) (278.5 ) Cash flows from financing activities Proceeds from the issuance of long-term debt — 740.8 — 40.1 40.1 551.3 1,332.2 Debt issuance costs and fees — (17.8 ) — (46.8 ) (46.8 ) — (64.6 ) Borrowings under lending agreements — 1,175.0 — — — — 1,175.0 Repayments under lending agreements — (1,602.0 ) — (23.8 ) (23.8 ) — (1,625.8 ) Cash paid for early extinguishments of debt — (219.9 ) — (149.2 ) (149.2 ) — (369.1 ) Scheduled debt retirements — (198.5 ) — (38.5 ) (38.5 ) — (237.0 ) Other (1.6 ) (2.3 ) — (19.4 ) (19.4 ) — (23.3 ) Transfer (to)/from affiliates (739.0 ) 742.0 4.7 (7.7 ) (3.0 ) — — Cash flows provided by financing activities (740.6 ) 617.3 4.7 (245.3 ) (240.6 ) 551.3 187.4 Cash flows from discontinued operations Cash flows from operating activities — — 80.2 0.3 80.5 (14.1 ) 66.4 Cash flows from investing activities — — (1.7 ) (7.7 ) (9.4 ) — (9.4 ) Cash flows from financing activities — — — — — — — Net cash provided by discontinued operations — — 78.5 (7.4 ) 71.1 (14.1 ) 57.0 Net increase/(decrease) in cash and cash equivalents 13.3 76.6 (87.0 ) 67.4 (19.6 ) — 70.3 Effect of deconsolidation of variable interest entities — — — (1.4 ) (1.4 ) — (1.4 ) Change in cash classified as assets held for sale — — 1.8 (1.7 ) 0.1 — 0.1 Cash and cash equivalents, beginning of period 122.7 (15.6 ) 429.9 365.1 795.0 — 902.1 Cash and cash equivalents, end of period $ 136.0 $ 61.0 $ 344.7 $ 429.4 $ 774.1 $ — $ 971.1 Note 23—Quarterly Results of Operations (Unaudited) ____________________ 114 (In millions) First Quarter (1), (6) Second Quarter (2), (7) Third Quarter (3), (7) Fourth Quarter (4), (8) 2012 Net revenues $ 2,207.5 $ 2,165.0 $ 2,197.4 $ 2,016.8 Income/(loss) from operations 60.1 187.7 (217.6 ) (343.6 ) Net loss (281.1 ) (241.8 ) (503.4 ) (465.9 ) Net loss attributable to Caesars (280.6 ) (241.7 ) (505.5 ) (469.7 ) Loss per share - basic and diluted (2.24 ) (1.93 ) (4.03 ) (3.75 ) 2011 Net revenues $ 2,115.3 $ 2,160.9 $ 2,188.9 $ 2,108.2 Income from operations 198.0 235.7 183.8 198.8 Net loss (144.8 ) (153.1 ) (173.4 ) (195.4 ) Net loss attributable to Caesars (147.5 ) (155.5 ) (164.0 ) (220.6 ) Loss per share - basic and diluted (5) (1.18 ) (1.24 ) (1.31 ) (1.76 ) (1) During the first quarter of 2012 , the Company recorded impairments of $167.5 million . There were no impairments recorded in the first quarter of 2011 . (2) During the second quarter of 2012 , the Company recorded impairments of $33.0 million . There were no impairments recorded in the second quarter of 2011 . (3) During the third quarter of 2012 , the Company recorded impairments of $419.0 million . During the third quarter of 2011 , the Company recorded impairments of $27.1 million . (4) During the fourth quarter of 2012 the Company recorded impairments of $448.2 million . During the fourth quarter of 2011 , the Company recorded impairments of $5.7 million . (5) Because loss per share amounts are calculated using the weighted average number of common and dilutive common equivalent shares outstanding during each quarter, the sum of the per share amounts for the four quarters may not equal the total loss per share amounts for the year. (6) Amounts presented for the first quarter of 2012 and 2011 have been recast to give effect to the Harrah's St. Louis casino disposition and the held for sale status of the subsidiaries that hold the Company's land concession in Macau as further discussed in Note 3 , " Acquisitions, Investments, Dispositions and Divestitures ." The table below recasts amounts as originally presented in our Consolidated Condensed Statements of Comprehensive Loss for the respective periods included in our Quarterly Report on Form 10-Q for the Quarterly Period Ended March 31, 2012 . Recast for discontinued operations First Quarter (In millions) 2012 2011 Net revenues as reported $ 2,271.9 $ 2,179.0 Less net revenues attributable to discontinued operations (64.4 ) (63.7 ) Net revenues as recasted $ 2,207.5 $ 2,115.3 Income from operations as reported $ 75.5 $ 213.5 Less income from operations attributable to discontinued operations (15.4 ) (15.5 ) Income from operations as recasted $ 60.1 $ 198.0 115 (7) Amounts presented for the second and third quarters of 2012 and 2011 have been recast to give effect to the held for sale status of the subsidiaries that hold the Company's land concession in Macau as further discussed in Note 3 , " Acquisitions, Investments, Dispositions and Divestitures ." The table below recasts amounts as originally presented in our Consolidated Condensed Statements of Comprehensive Loss for the respective periods included in our Quarterly Report on Form 10-Q for the Quarterly Period Ended June 30, 2012 or our Quarterly Report on Form 10-Q for the Quarterly Period Ended September 30, 2012 , as appropriate. Recast for discontinued operations Second Quarter Third Quarter (In millions) 2012 (a) 2011 2012 2011 Net revenues as reported $ 2,165.7 $ 2,161.7 $ 2,198.4 $ 2,189.7 Less net revenues attributable to discontinued operations (0.7 ) (0.8 ) (1.0 ) (0.8 ) Net revenues as recasted $ 2,165.0 $ 2,160.9 $ 2,197.4 $ 2,188.9 Income/(loss) from operations as reported (a) $ 81.8 $ 231.6 $ (220.6 ) $ 179.8 Less loss from operations attributable to discontinued operations (a) 105.9 4.1 3.0 4.0 Income/(loss) from operations as recasted $ 187.7 $ 235.7 $ (217.6 ) $ 183.8 (a) The amounts shown for the second quarter of 2012 include an impairment of $101.0 million related to the Company's land concession in Macau. (8) Amounts presented for the fourth quarter of 2011 have been recast to give effect to the Harrah's St. Louis casino disposition and the held for sale status of the subsidiaries that hold the Company's land concession in Macau as further discussed in Note 3 , " Acquisitions, Investments, Dispositions and Divestitures ." The table below recasts the amounts as originally presented in our Note 24, "Quarterly Results of Operations (Unaudited)" included in Item 8 of our 2011 Form 10-K . Recast for discontinued operations Fourth Quarter (In millions) 2011 Net revenues as reported $ 2,172.4 Less net revenues attributable to discontinued operations (64.2 ) Net revenues as recasted $ 2,108.2 Income from operations as reported $ 211.6 Less income from operations attributable to discontinued operations (12.8 ) Income from operations as recasted $ 198.8 None. Disclosure Controls and Procedures Our principal executive officer and principal financial officer have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2012 , including controls and procedures to timely alert management to material information relating to the Company and its subsidiaries required to be included in our periodic SEC filings. Based on such evaluation, they have concluded that, as of such date, our disclosure controls and procedures were effective. Internal Control over Financial Reporting Management’s Annual Report on Internal Control Over Financial Reporting Internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) refers to the process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, and effected by our board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Management is responsible for establishing and maintaining adequate internal control over our financial reporting. We have evaluated the effectiveness of our internal control over financial reporting as of December 31, 2012 . The evaluation was performed using the internal control evaluation framework developed by the Committee of Sponsoring Organizations of the Treadway Commission. Based on such evaluation, management concluded that, as of such date, our internal control over financial reporting was effective. Attestation Report of the Independent Registered Public Accounting Firm Deloitte & Touche LLP has issued an attestation report on our internal control over financial reporting. Their report follows Item 9B of this report below. Changes in Internal Control Over Financial Reporting There has been no change in our internal control over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. None. 116 ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ITEM 9A. Controls and Procedures ITEM 9B. Other Information REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Caesars Entertainment Corporation: We have audited the internal control over financial reporting of Caesars Entertainment Corporation and subsidiaries (the “Company”) as of December 31, 2012 , based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2012 , based on the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and consolidated financial statement schedules as of and for the year ended December 31, 2012 of the Company and our report dated March 15, 2013 expressed an unqualified opinion on those consolidated financial statements and consolidated financial statement schedules. /s/ Deloitte & Touche LLP Las Vegas, Nevada March 15, 2013 117 PART III ITEM 10. Directors, Executive Officers, and Corporate Governance. We incorporate by reference the information appearing under "Executive Officers" in Item 1 of this report and appearing under the captions "Executive Officers," "Corporate Governance - Section 16(a) Beneficial Ownership Reporting Compliance" and "Corporate Governance - Code of Ethics" in our definitive Proxy Statement for our 2012 Annual Meeting of Stockholders, which we expect to file with the Securities and Exchange Commission on or about March 18, 2013 (the "Proxy Statement"). ITEM 11. Executive Compensation. We incorporate by reference the information appearing under the captions "Executive Compensation" and "Corporate Governance - Human Resources Committee Interlocks and Insider Participation" in the Proxy Statement. We incorporate by reference the information appearing under the caption "Security Ownership of Certain Beneficial Owners and Management" in the Proxy Statement. The information under Part II, Item 5. "Market for the Company's Common Stock, Related Stockholder Matters and Issuer Purchases of Equity Securities - Equity Compensation Plan Information" of this report is also incorporated herein by reference. We incorporate by reference the information appearing under the captions "Certain Relationships and Related Party Transactions" and "Corporate Governance - Director Independence" in the Proxy Statement. We incorporate by reference the information appearing under the caption "Proposal 4 - Ratification of Appointment of Independent Registered Public Accounting Firm" in the Proxy Statement. 118 ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. ITEM 13. Certain Relationships and Related Transactions, and Director Independence. ITEM 14. Principal Accountant Fees and Services. PART IV ITEM 15. Exhibits, Financial Statement Schedules. Report of Independent Registered Public Accounting Firm. Consolidated Balance Sheets as of December 31, 2012 and 2011 . Consolidated Statements of Comprehensive Loss for the Years Ended December 31, 2012 , 2011 , and 2010 . Consolidated Statements of Stockholders’ Equity/(Deficit) for the Years Ended December 31, 2012 , 2011 , and 2010 . Consolidated Statements of Cash Flows for the Years Ended December 31, 2012 , 2011 , and 2010 . Schedule I—Condensed Financial Information of Registrant Parent Company Only as of December 31, 2012 and 2011 and for the Years Ended December 31, 2012, 2011 and 2010. Schedule II—Consolidated Valuation and Qualifying Accounts for the Years Ended December 31, 2012 , 2011 , and 2010 . Schedules III, IV, and V are not applicable and have therefore been omitted. 119 (a) 1. Financial statements of the Company (including related notes to consolidated financial statements) filed as part of this report are listed below: 2. Financial statement schedules of the Company as follows: 3. Exhibits Incorporated by Reference Exhibit Number Exhibit Description Filed Herewith Form Period Ending Exhibit Filing Date 3.1 Certificate of Amendment of Certificate of Incorporation of Caesars Entertainment Operating Company, Inc. dated November 22, 2010 — 8-K — 3.3 11/24/2010 3.2 Restated Certificate of Incorporation of Harrah's Operating Company, Inc. (f/k/a Embassy Suites, Inc.), as amended. — S-4 — 3.1 10/29/2008 3.3 Certificate of Amendment of Restated Certificate of Incorporation of Harrah's Operating Company, Inc., dated May 19, 2008. — 10-K 12/31/2008 3.4 3/17/2009 3.4 Bylaws of Harrah's Operating Company, Inc., as amended. — S-4 — 3.4 10/29/2008 3.5 Second Amended and Restated Certificate of Incorporation of Caesars Entertainment Corporation, dated February 8, 2012 — 10-K 12/31/2011 3.7 3/15/2012 3.6 Amended Bylaws of Caesars Entertainment Corporation, as amended, dated February 8, 2012. — 10-K 12/31/2011 3.8 3/15/2012 4.1 Certificate of Designation of Non-Voting Perpetual Preferred Stock of Harrah’s Entertainment, Inc., dated January 28, 2008. — S-8 — 4.4 1/31/2008 120 Incorporated by Reference Exhibit Number Exhibit Description Filed Herewith Form Period Ending Exhibit Filing Date 4.2 Certificate of Amendment to the Certificate of Designation of Non-Voting Perpetual Preferred Stock of Harrah’s Entertainment, Inc., dated March 29, 2010. — 8-K — 3.1 3/30/2010 4.3 Certificate of Elimination of Non-Voting Perpetual Preferred Stock of Harrah’s Entertainment, Inc., dated March 29, 2010. — 8-K — 3.2 3/30/2010 4.4 Indenture, dated as of April 11, 2003, between Park Place Entertainment Corp., as Issuer, and U.S. Bank National Association, as Trustee, with respect to the 7% Senior Notes due 2013. — *S-4 — 4.1 4/29/2003 4.5 First Supplemental Indenture, dated as of June 13, 2005, between Harrah’s Entertainment, Inc., Harrah’s Operating Company, Inc., Caesars Entertainment, Inc. and U.S. Bank National Association, as Trustee, with respect to the 7% Senior Notes due 2013. — 10-Q 6/30/2005 4.22 8/9/2005 4.6 Second Supplemental Indenture, dated as of July 28, 2005, among Harrah’s Entertainment, Inc., as Guarantor, Harrah’s Operating Company, Inc., as Issuer, and U.S. Bank National Association, as Trustee, to the Indenture, dated as of April 11, 2003, as amended and supplemented by a First Supplemental Indenture, dated as of June 13, 2005, with respect to the 7% Senior Notes due 2013. — 8-K — 4.7 8/2/2005 4.7 Indenture, dated as of December 11, 2003, between Harrah’s Operating Company, Inc., as Issuer, Harrah’s Entertainment, Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 5.375% Senior Notes due 2013. — 10-K 12/31/2003 10.6 3/5/2004 4.8 Amended and Restated Indenture, dated as of July 28, 2005, among Harrah’s Entertainment, Inc., as Guarantor, Harrah’s Operating Company, Inc., as Issuer, and U.S. Bank National Association, as Trustee, relating to the Floating Rate Contingent Convertible Senior Notes due 2024. — 8-K — 4.8 8/2/2005 4.9 First Supplemental Indenture, dated as of September 9, 2005, to Amended and Restated Indenture, dated as of July 28, 2005, among Harrah’s Operating Company, Inc., as Issuer, Harrah’s Entertainment, Inc. as Guarantor, and U.S. Bank National Association, as Trustee, relating to the Floating Rate Contingent Convertible Senior Notes due 2024. — **S-3/A — 4.7 9/19/2005 121 Incorporated by Reference Exhibit Number Exhibit Description Filed Herewith Form Period Ending Exhibit Filing Date 4.10 Second Supplemental Indenture, dated as of January 8, 2008, to Amended and Restated Indenture, dated as of July 28, 2005, among Harrah’s Operating Company, Inc., as Issuer, Harrah’s Entertainment, Inc. as Guarantor, and U.S. Bank National Association, as Trustee, relating to the Floating Rate Contingent Convertible Senior Notes due 2024. — 10-K 12/31/2007 4.25 2/29/2008 4.11 Third Supplemental Indenture, dated as of January 28, 2008, to Amended and Restated Indenture, dated as of July 28, 2005, among Harrah’s Operating Company, Inc., as Issuer, Harrah’s Entertainment, Inc. as Guarantor, and U.S. Bank National Association, as Trustee, relating to the Floating Rate Contingent Convertible Senior Notes due 2024. — 8-K — 4.1 1/28/2008 4.12 Indenture, dated as of May 27, 2005, between Harrah’s Operating Company, Inc., as Issuer, Harrah’s Entertainment, Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 5.625% Senior Notes due 2015. — 8-K — 4.1 6/3/2005 4.13 First Supplemental Indenture, dated as of August 19, 2005, to Indenture, dated as of May 27, 2005, between Harrah’s Operating Company, Inc., as Issuer, Harrah’s Entertainment, Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 5.625% Senior Notes due 2015. — S-4 — 4.44 8/25/2005 4.14 Second Supplemental Indenture, dated as of September 28, 2005, to Indenture, dated as of May 27, 2005, between Harrah’s Operating Company, Inc., as Issuer, Harrah’s Entertainment, Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 5.625% Senior Notes due 2015. — 8-K — 4.4 10/3/2005 4.15 Indenture dated as of September 28, 2005, among Harrah’s Operating Company, Inc., as Issuer, Harrah’s Entertainment, Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 5.75% Senior Notes due 2017. — 8-K — 4.1 10/3/2005 4.16 Indenture, dated as of June 9, 2006, between Harrah’s Operating Company, Inc., Harrah’s Entertainment, Inc. and U.S. National Bank Association, as Trustee, relating to the 6.50% Senior Notes due 2016. — 8-K — 4.1 6/14/2006 122 Incorporated by Reference Exhibit Number Exhibit Description Filed Herewith Form Period Ending Exhibit Filing Date 4.17 Officers’ Certificate, dated as of June 9, 2006, pursuant to Sections 301 and 303 of the Indenture dated as of June 9, 2006 between Harrah’s Operating Company, Inc., Harrah’s Entertainment, Inc. and U.S. National Bank Association, as Trustee, relating to the 6.50% Senior Notes due 2016. — 8-K — 4.2 6/14/2006 4.18 Indenture, dated as of February 1, 2008, by and among Harrah’s Operating Company, Inc., the Guarantors (as defined therein) and U.S. Bank National Association, as Trustee, relating to the 10.75% Senior Cash Pay Notes due 2016 and 10.75%/11.5% Senior Toggle Notes due 2018. — 8-K — 10.1 2/4/2008 4.19 First Supplemental Indenture, dated as of June 12, 2008, by and among Harrah’s Operating Company, Inc., the Guarantors (as defined therein) and U.S. Bank National Association, as Trustee, relating to the 10.75% Senior Cash Pay Notes due 2016 and 10.75%/11.5% Senior Toggle Notes due 2018. — 10-Q 6/30/2008 4.34 8/11/2008 4.20 Second Supplemental Indenture, dated as of January 9, 2009, by and among Harrah’s Operating Company, Inc., the Guarantors (as defined therein) and U.S. Bank National Association, as Trustee relating to the 10.75% Senior Notes due 2016 and 10.75%/11.5% Senior Toggle Notes due 2018. — 10-Q 3/31/2009 4.35 5/14/2009 4.21 First Supplemental Indenture, dated as of March 26, 2009, by and among Harrah’s Operating Company, Inc., the Note Guarantors (as defined therein) and U.S. Bank National Association, as Trustee relating to the 10.75% Senior Notes due 2016 and 10.75%/11.5% Senior Toggle Notes due 2018. — 8-K — 4.1 3/31/2009 4.22 Indenture, dated as of December 24, 2008, by and among Harrah’s Operating Company, Inc., Harrah’s Entertainment, Inc. and U.S. Bank National Association, as Trustee, relating to the 10.00% Second-Priority Senior Secured Notes due 2018 and 10.00% Second-Priority Senior Secured Notes due 2015. — S-4/A — 4.39 12/24/2008 4.23 First Supplemental Indenture, dated as of July 22, 2009, by and among Harrah’s Operating Company, Inc., Harrah’s Entertainment, Inc. and U.S. Bank National Association, as Trustee, relating to the 10.00% Second-Priority Senior Secured Notes due 2018 and 10.00% Second-Priority Senior Secured Notes due 2015. — 10-Q 6/30/2009 4.38 8/13/2009 123 Incorporated by Reference Exhibit Number Exhibit Description Filed Herewith Form Period Ending Exhibit Filing Date 4.24 Collateral Agreement, dated as of December 24, 2008, by and among Harrah’s Operating Company, Inc. as Issuer, each Subsidiary of the Issuer identified therein, and U.S. Bank National Association, as Collateral Agent relating to the 12.75% Second-Priority Senior Secured Notes due 2018. — S-4/A — 4.4 12/24/2008 4.25 Indenture, dated as of April 15, 2009, by and among Harrah’s Operating Company, Inc., Harrah’s Entertainment, Inc. and U.S. Bank National Association, as trustee and collateral agent relating to the 10.00% Second-Priority Senior Secured Notes due 2018. — 8-K — 4.1 4/20/2009 4.26 First Supplemental Indenture, dated May 18, 2009, by and among Harrah’s Operating Company, Inc., Harrah’s Entertainment, Inc. and U.S. Bank National Association, as trustee relating to the 10.00% Second-Priority Senior Secured Notes due 2018. — 10-Q 6/30/2009 4.40 8/13/2009 4.27 Indenture, dated as of June 10, 2009, by and among Harrah’s Operating Escrow LLC, Harrah’s Escrow Corporation, Harrah’s Entertainment, Inc. and U.S. Bank National Association, as trustee, relating to the 11.25% Senior Secured Notes due 2017. — 8-K — 4.1 6/15/2009 4.28 Supplemental Indenture, dated as of June 10, 2009, by and among Harrah’s Operating Company, Inc. and U.S. Bank National Association, as trustee, relating to the 11.25% Senior Secured Notes due 2017. — 8-K — 4.20 6/15/2009 4.29 Second Supplemental Indenture, dated as of September 11, 2009, by and among Harrah’s Operating Company, Inc., Harrah’s Entertainment, Inc. and U.S. Bank National Association, as trustee, relating to the 11.25% Senior Secured Notes due 2017. — 8-K — 4.1 9/17/2009 4.30 Indenture, dated as of April 16, 2010, by and among Harrah’s Operating Escrow LLC, Harrah’s Escrow Corporation, Harrah’s Entertainment, Inc. and U.S. Bank National Association, as trustee, relating to the 12.75% Second-Priority Senior Secured Notes due 2018. — 8-K — 4.1 4/22/2010 4.31 Supplemental Indenture, dated as of May 20, 2010, by and among Harrah’s Operating Company, Inc. and U.S. Bank National Association, as trustee, relating to the 12.75% Second-Priority Senior Secured Notes due 2018. — 8-K — 4.1 5/24/2010 124 Incorporated by Reference Exhibit Number Exhibit Description Filed Herewith Form Period Ending Exhibit Filing Date 4.32 Joinder and Supplement to the Intercreditor Agreement, dated as of May 20, 2010, by and among U.S. Bank National Association, as new trustee, U.S. Bank National Association, as second priority agent, Bank of America, N.A., as credit agreement agent and U.S. Bank national Association, as other first priority lien obligations agent, relating to the 12.75% Second-Priority Senior Secured Notes due 2018. — 8-K — 10.1 5/24/2010 4.33 Additional Secured Party Consent, dated as of May 20, 2010, by U.S. Bank National Association, as agent or trustee for persons who shall become “Secured Parties” under the Collateral Agreement dated as of December 24, 2008, relating to the 12.75% Second-Priority Senior Secured Notes due 2018. — 8-K — 10.2 5/24/2010 4.34 Stockholders’ Agreement, dated as of January 28, 2008, by and among Apollo Hamlet Holdings, LLC, Apollo Hamlet Holdings B, LLC, TPG Hamlet Holdings, LLC, TPG Hamlet Holdings B, LLC, Co-Invest Hamlet Holdings, Series LLC, Co-Invest Hamlet Holdings B, LLC, Hamlet Holdings LLC and Harrah’s Entertainment, Inc., and, solely with respect to Sections 3.01 and 6.07, Apollo Investment Fund VI, L.P. and TPG V Hamlet AIV, L.P. — 8-K/A — 10.14 2/7/2008 4.35 Form of First Amendment to the Stockholders’ Agreement by and among Apollo Hamlet Holdings, LLC, Apollo Hamlet Holdings B, LLC, TPG Hamlet Holdings, LLC, TPG Hamlet Holdings B, LLC, Co-Invest Hamlet Holdings, Series LLC, Co-Invest Hamlet Holdings B, LLC, Hamlet Holdings LLC and Caesars Entertainment Corporation. — S-1/A — 10.91 2/2/2012 4.36 Services Agreement, dated as of January 28, 2008, by and among Harrah’s Entertainment, Inc., Apollo Management VI, L.P., Apollo Alternative Assets, L.P. and TPG Capital, L.P. — 8-K/A — 10.15 2/7/2008 4.37 Indenture dated as of February 3, 2012 among Chester Downs and Marina, LLC , a Pennsylvania limited liability company, Chester Downs Finance Corp., and, together with the Company, Subsidiary Guarantors party hereto from time to time, U.S. Bank National Association, as trustee and U.S. Bank National Association, as collateral agent, relating to the 9.25% Senior Secured Notes due 2020. — 10-K 12/31/2011 4.43 3/15/2012 Incorporated by Reference Exhibit Number Exhibit Description Filed Herewith Form Period Ending Exhibit Filing Date 4.38 Indenture, dated as of February 14, 2012, by and among Caesars Operating Escrow LLC, Caesars Escrow Corporation, Caesars Entertainment Corporation and U.S. Bank National Association, as trustee, relating to the 8.5% Senior Secured Notes due 2020. — 8-K — 4.1 2/15/2012 4.39 Registration Rights Agreement, dated as of February 14, 2012, by and among Caesars Operating Escrow LLC, Caesars Escrow Corporation, Caesars Entertainment Corporation and J.P. Morgan Securities LLC, as representative of the initial purchasers, relating to the 8.5% Senior Secured Notes due 2020. — 8-K — 4.2 2/15/2012 4.40 Supplemental Indenture, dated as of March 1, 2012, by and among Caesars Entertainment Operating Company, Inc. and U.S. Bank National Association, as trustee, relating to the 8.5% Senior Secured Notes due 2020. — 8-K — 4.1 3/2/2012 4.41 Joiner to the Registration Rights Agreement, dated as of March 1, 2012 (to the Registration Rights Agreement, dated as of February 14, 2012), by and among Caesars Entertainment Operating Company, Inc. and J.P. Morgan Securities LLC, as representative of the initial purchasers, relating to the 8.5% Senior Secured Notes due 2020. — 8-K — 4.2 3/2/2012 4.42 Equity Distribution Agreement, dated April 12, 2012, between Caesars Entertainment Corporation, Citigroup Global Markets, Inc. and Credit Suisse Securities (USA) LLC. — 8-K — 1.1 4/13/2012 4.43 Indenture dated as of August 22, 2012 among Caesars Operating Escrow, LLC, Caesars Escrow Corporation, Caesars Entertainment Corporation, and U.S. Bank National Association, as trustee, related to the 9% Senior Secured Notes due 2020. — 8-K — 4.1 8/22/2012 4.44 Registration Rights Agreement, dated as of August 22, 2012, by and among Caesars Operating Escrow, LLC, Caesars Escrow Corporation, Caesars Entertainment Corporation, and Citigroup Global Markets Inc. as representative of the initial purchasers, related to the 9% Senior Secured Notes due 2020. — 8-K — 4.2 8/22/2012 4.45 Joinder to Registration Rights Agreement, dated October 5, 2012 (to the Registration Rights Agreement, dated August 22, 2012) by and among Caesars Operating Escrow LLC , Caesars Escrow Corporation, Caesars Entertainment Corporation and Citigroup Global Markets, as representative of the several Initial Purchasers, related to the 9% Senior Secured Notes due 2020. — 8-K — 4.2 10/10/2012 125 126 Incorporated by Reference Exhibit Number Exhibit Description Filed Herewith Form Period Ending Exhibit Filing Date 4.46 Supplemental Indenture, dated as of October 5, 2012 (to the Indenture dated August 22, 2012), among Caesars Entertainment Operating Company, Inc., and U.S. Bank National Association, as trustee, related to the 9% Senior Secured Notes due 2020. — 8-K — 4.1 10/10/2012 4.47 Additional Notes Supplemental Indenture, dated as of December 13, 2012 (to the August 22, 2012 and October 5, 2012 Indenture and Supplemental Indenture), by and among Caesars Operating Escrow LLC, Caesars Escrow Corporation, Caesars Entertainment Corporation and U.S. Bank National Association, as trustee, related to the 9% Senior Secured Notes due 2020. — 8-K — 4.1 12/13/2012 4.48 Registration Rights Agreement , dated as of December 13, 2012 (to the August 22, 2012 and October 5, 2012 Registration Rights Agreement and Joinder), by and among Caesars Operating Escrow LLC, Caesars Escrow Corporation, Caesars Entertainment Corporation and Citigroup Global Markets Inc., as representative of the initial purchasers, related to the 9% Senior Secured Notes due 2020. — 8-K — 4.2 12/13/2012 4.49 Indenture, dated as of February 15, 2013, by and among Caesars Operating Escrow LLC, Caesars Escrow Corporation, Caesars Entertainment Corporation and U.S. Bank National Association, as trustee, related to the 9% Senior Secured Notes due 2020. — 8-K — 4.1 2/15/2013 4.50 Registration Rights Agreement, dated as of February 15, 2013, by and among Caesars Operating Escrow LLC, Caesars Escrow Corporation, Caesars Entertainment Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representative of the initial purchasers, related to the 9% Senior Secured Notes due 2020. — 8-K — 4.2 2/15/2013 4.51 Escrow Agreement, dated as of February 15, 2013, by and among Caesars Operating Escrow LLC, Caesars Escrow Corporation, U.S. Bank National Association, as escrow agent and securities intermediary, and U.S. Bank National Association, as trustee, related to the 9% Senior Secured Notes due 2020. — 8-K — 10.1 2/15/2013 127 Incorporated by Reference Exhibit Number Exhibit Description Filed Herewith Form Period Ending Exhibit Filing Date 4.52 Supplemental Indenture, dated as of February 20, 2013 (to the August 22, 2012 Indenture, the October 5, 2012 Supplemental Indenture and the December 13, 2012 Supplemental Indenture) , by and among Caesars Entertainment Operating Company, Inc. and U.S. Bank National Association, as trustee, in connection with the 9% Senior Secured Notes due 2020. — 8-K — 4.1 2/20/2013 4.53 Joinder to Registration Rights Agreement, dated as of February 20, 2013 (to the August 22, 2012 Regitration Rights Agreement, the October 5, 2012 Joinder and the December 13, 2012 Joinder) , by and among Caesars Entertainment Operating Company, Inc. and Citigroup Global Markets Inc., as representative of the initial purchasers, related to the 9% Senior Secured Notes due 2020.. — 8-K — 4.2 2/20/2013 10.1 Credit Agreement, dated as of January 28, 2008, by and among Hamlet Merger Inc., Harrah’s Operating Company, Inc. as Borrower, the Lenders party thereto from time to time, Bank of America, N.A., as Administrative Agent and Collateral Agent, Deutsche Bank AG New York Branch, as Syndication Agent, and Citibank, N.A., Credit Suisse, Cayman Islands Branch, JPMorgan Chase Bank, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman Sachs Credit Partners L.P., Morgan Stanley Senior Funding, Inc., and Bear Sterns Corporate Lending, Inc., as Co-Documentation Agents. — 8-K/A — 10.1 2/7/2008 10.2 Incremental Facility Amendment, dated as of September 26, 2009 to the Credit Agreement dated as of January 28, 2008. — 8-K — 99.1 9/29/2009 10.3 Amendment Agreement dated as of May 20, 2011, among Caesars Entertainment Corporation, Caesars Entertainment Operating Company, Inc. each Subsidiary Loan Party party thereto, the lenders party thereto and Bank of America, N.A., as administrative agent under the Credit Agreement dated as of January 28, 2008, among Caesars Entertainment Corporation, Caesars Entertainment Operating Company, Inc., the lenders party thereto from time to time and the other parties party thereto. — 8-K/A — 10.1 5/23/2011 128 Incorporated by Reference Exhibit Number Exhibit Description Filed Herewith Form Period Ending Exhibit Filing Date 10.4 Reaffirmation Agreement, dated as of March 1, 2012, among Caesars Entertainment Corporation, Caesars Entertainment Operating Company, Inc. each Subsidiary Loan Party party thereto, the lenders party thereto and Bank of America, N.A., as administrative agent under the Amended and Restated Credit Agreement dated as of May 20, 2011, among Caesars Entertainment Corporation, Caesars Entertainment Operating Company, Inc., the lenders party thereto from time to time and the other parties party thereto. — 8-K — 10.2 3/2/2012 10.5 Reaffirmation Agreement, dated as of October 5, 2012, among Caesars Entertainment Corporation, Caesars Entertainment Operating Company, Inc. each Subsidiary Loan Party party thereto, the lenders party thereto and Bank of America, N.A., as administrative agent under the Amended and Restated Credit Agreement dated as of May 20, 2011, among Caesars Entertainment Corporation, Caesars Entertainment Operating Company, Inc., the lenders party thereto from time to time and the other parties party thereto. — 8-K — 10.1 10/10/2012 10.6 Amendment and Waiver to Credit Agreement, dated as of June 3, 2009, among Harrah’s Operating Company, Inc., Harrah’s Entertainment, Inc., the lenders from time to time party thereto (the “Lenders”), Bank of America, N.A, as administrative agent, and the other parties thereto. — 8-K/A — 10.1 6/11/2009 10.7 Amendment Agreement, dated as of March 1, 2012, among Caesars Entertainment Corporation, Caesars Entertainment Operating Company, Inc. each Subsidiary Loan Party party thereto, the lenders party thereto and Bank of America, N.A., as administrative agent under the Amended and Restated Credit Agreement dated as of May 20, 2011, among Caesars Entertainment Corporation, Caesars Entertainment Operating Company, Inc., the lenders party thereto from time to time and the other parties party thereto. — 8-K — 10.1 3/2/2012 10.8 Amended and Restated Collateral Agreement dated and effective as of January 28, 2008 (as amended and restated on June 10, 2009), among Harrah’s Operating Company, Inc., each Subsidiary Party that is party thereto and Bank of America, N.A., as Collateral Agent. — 8-K — 10.3 6/15/2009 129 Incorporated by Reference Exhibit Number Exhibit Description Filed Herewith Form Period Ending Exhibit Filing Date 10.9 Amended and Restated Guaranty and Pledge Agreement dated and effective as of January 28, 2008 (as amended and restated on June 10, 2009), made by Harrah’s Entertainment, Inc. (as successor to Hamlet Merger Inc.) in favor of Bank of America, N.A., as Administrative Agent and Collateral Agent. — 8-K — 10.4 6/15/2009 10.10 Other First Lien Secured Party Consent to the Collateral Agreement, dated as of February 20, 2013, by U.S. Bank National Association, as agent or trustee for persons who shall become “Secured Parties” under the Collateral Agreement dated as of January 28, 2008, as amended and restated as of June 10, 2009. — 8-K — 10.2 2/20/2013 10.11 Other First Lien Secured Party Consent to the Guaranty and Pledge Agreement, dated as of February 20, 2013, by U.S. Bank National Association, as agent or trustee for persons who shall become “Secured Parties” under the Guaranty and Pledge Agreement dated as of January 28, 2008, as amended and restated as of June 10, 2009. — 8-K — 10.3 2/20/2013 10.12 Intercreditor Agreement, dated as of January 28, 2008 by and among Bank of America, N.A. as administrative agent and collateral agent under the Credit Agreement, Citibank, N.A. as administrative agent under the Bridge-Loan Agreement and U.S. Bank National Association as Trustee under the Indenture. — 10-K 12/31/2008 10.3 3/17/2009 10.13 Intercreditor Agreement, dated as of December 24, 2008 among Bank of America, N.A. as Credit Agreement Agent, each Other First Priority Lien Obligations Agent from time to time, U.S. Bank National Association as Trustee and each collateral agent for any Future Second Lien Indebtedness from time to time. — 10-K 12/31/2008 10.4 3/17/2009 10.14 Joinder and Supplement to the Intercreditor Agreement, dated as of April 15, 2009 (to the Agreement dated December 24, 2008) by and among U.S. Bank National Association, as new trustee, U.S. Bank National Association, as Trustee under the Intercreditor Agreement, Bank of America, N.A., as Credit Agreement Agent under the Intercreditor Agreement, and any other First Lien Agent and Second Priority Agent from time to time party to the Intercreditor Agreement. — 8-K — 10.1 4/20/2009 130 Incorporated by Reference Exhibit Number Exhibit Description Filed Herewith Form Period Ending Exhibit Filing Date 10.15 First Lien Intercreditor Agreement, dated as of June 10, 2009 (to the Agreement dated December 24, 2008), by and among Bank of America, N.A., as collateral agent for the First Lien Secured Parties and as Authorized Representative for the Credit Agreement Secured Parties, U.S. Bank National Association, as Authorized Representative for the Initial Other First Lien Secured Parties, and each additional Authorized Representative from time to time party to the First Lien Intercreditor Agreement. — 8-K/A — 10.1 6/11/2009 10.16 Joinder and Supplement to Intercreditor Agreement, dated June 10, 2009 (to the Agreement dated December 24, 2008) by and among U.S. Bank National Association, as new trustee, U.S. Bank National Association, as Trustee under the Intercreditor Agreement, Bank of America, N.A., as Credit Agreement Agent under the Intercreditor Agreement, U.S. Bank National Association as a Second Priority Agent under the Intercreditor Agreement and any other First Lien Agent and Second Priority Agent from time to time party to the Intercreditor Agreement. (Exhibit A thereto incorporated by reference to exhibit 10.4 to the Registrant's Annual Report on Form 10-K filed March 17, 2009.) — 8-K — 10.2 6/15/2009 10.17 Joinder and Supplement to the Intercreditor Agreement, dated as of February 20, 2013 (the Intercreditor Agreement dated December 24, 2008) , by and among U.S. Bank National Association, as new trustee, U.S. Bank National Association, as second priority agent, Bank of America, N.A., as credit agreement agent and U.S. Bank National Association, as other first priority lien obligations agent. — 8-K — 10.1 2/20/2013 10.18 Joinder and Supplement to the Intercreditor Agreement, dated as of September 11, 2009 by and among U.S. Bank National Association, as new trustee, U.S. Bank National Association, as Trustee under the Intercreditor Agreement, Bank of America, N.A., as Credit Agreement Agent under the Intercreditor Agreement, and any other First Lien Agent and Second Priority Agent from time to time party to the Intercreditor Agreement related to the 11.25% Senior Secured Notes due 2017. — 8-K — 10.1 9/17/2009 131 Incorporated by Reference Exhibit Number Exhibit Description Filed Herewith Form Period Ending Exhibit Filing Date 10.19 Joinder and Supplement to the Intercreditor Agreement, dated as of March 1, 2012, by and among U.S. Bank National Association, as new trustee, U.S. Bank National Association, as second priority agent, Bank of America, N.A., as credit agreement agent and U.S. Bank National Association, as other first priority lien obligations agent, relating to the 8.5% Senior Secured Notes due 2020. — 8-K — 10.3 3/2/2012 10.20 Other First Lien Secured Party Consent to the Collateral Agreement, dated as of March 1, 2012, by U.S. Bank National Association, as agent or trustee for persons who shall become “Secured Parties” under the Collateral Agreement dated as of January 28, 2008, as amended and restated as of June 10, 2009. — 8-K — 10.4 3/2/2012 10.21 Other First Lien Secured Party Consent to the Guaranty and Pledge Agreement, dated as of March 1, 2012, by U.S. Bank National Association, as agent or trustee for persons who shall become “Secured Parties” under the Guaranty and Pledge Agreement dated as of January 28, 2008, as amended and restated as of June 10, 2009. — 8-K — 10.5 3/2/2012 10.22 Other First Lien Secured Party Consent, dated as of September 11, 2009, by U.S. Bank National Association, as agent or trustee for persons who shall become “Secured Parties” under the Amended and Restated Collateral Agreement dated and effective as of January 28, 2008 (as amended and restated on June 10, 2009). — 8-K — 10.2 9/17/2009 10.23 Other First Lien Secured Party Consent, dated as of September 11, 2009, by U.S. Bank National Association, as agent or trustee for persons who shall become “Secured Parties” under the Amended and Restated Guaranty and Pledge Agreement dated and effective as of January 28, 2008 (as amended and restated on June 10, 2009). — 8-K — 10.3 9/17/2009 10.24 Amended and Restated Loan Agreement, dated as of February 19, 2010, between PHW Las Vegas, LLC and Wells Fargo Bank, N.A. as trustee for the Credit Suite First Boston Mortgage Securities Corp. Commercial Pass-Through Certificates, Series 2007-TFL2. — 10-Q 3/31/2010 10.24 5/10/2010 132 Incorporated by Reference Exhibit Number Exhibit Description Filed Herewith Form Period Ending Exhibit Filing Date 10.25 Guaranty Agreement, dated February 19, 2010, by and between Harrah’s Entertainment, Inc. and Wells Fargo Bank, N.A., as trustee for The Credit Suisse First Boston Mortgage Securities Corp. Commercial Mortgage Pass-Through Certificates, series 2007-TFL2. — 8-K — 99.1 2/25/2010 10.26 Financial Counseling Plan of Harrah's Entertainment, Inc., as amended January 1996. — 10-K 12/31/1995 10.22 3/6/1996 10.27 Trust Agreement dated June 20, 2001 by and between Harrah’s Entertainment, Inc. and Wells Fargo Bank Minnesota, N.A. — 10-Q 9/30/2001 10.4 11/9/2001 10.28 Escrow Agreement, dated February 6, 1990, by and between The Promus Companies Incorporated, certain subsidiaries thereof, and Sovran Bank, as escrow agent — 10-K 12/29/1989 Unknown 3/28/1990 10.29 Amendment to Escrow Agreement dated as of October 29, 1993 (to the Agreement dated February 9, 1990) among The Promus Companies Incorporated, certain subsidiaries thereof, and NationsBank, formerly Sovran Bank. — 10-K 12/31/1993 10.66 3/28/1994 10.30 Amendment, dated as of June 7, 1995 ( the Agreement dated February 6, 1990 and amended on October 29, 1993), to Escrow Agreement among The Promus Companies Incorporated, certain subsidiaries thereof and NationsBank. — 8-K — 10.12 6/15/1995 10.31 Amendment, dated as of July 18, 1996, to Escrow Agreement between Harrah’s Entertainment, Inc. and NationsBank. — 10-Q 9/30/1996 10.1 11/12/1996 10.32 Amendment, dated as of October 30, 1997, to Escrow Agreement between Harrah’s Entertainment, Inc., Harrah’s Operating Company, Inc. and NationsBank. — 10-K 12/31/1997 10.82 3/10/1998 10.33 Amendment to Escrow Agreement, dated April 26, 2000, between Harrah’s Entertainment, Inc. and Wells Fargo Bank Minnesota, N.A., Successor to Bank of America, N.A. — 10-Q 9/30/2000 10.8 11/13/2000 10.34 Letter Agreement with Wells Fargo Bank Minnesota, N.A., dated August 31, 2000, concerning appointment as Escrow Agent under Escrow Agreement for deferred compensation plans. — 10-Q 9/30/2000 10.7 11/13/2000 133 Incorporated by Reference Exhibit Number Exhibit Description Filed Herewith Form Period Ending Exhibit Filing Date †10.35 Harrah’s Entertainment, Inc. Amended and Restated Executive Deferred Compensation Trust Agreement dated January 11, 2006 by and between Harrah’s Entertainment, Inc. and Wells Fargo Bank, N.A. — 10-K 12/31/2007 10.41 2/29/2008 †10.36 Amendment to the Harrah’s Entertainment, Inc. Amended and Restated Executive Deferred Compensation Trust Agreement effective January 28, 2008 by and between Harrah’s Entertainment, Inc. and Wells Fargo Bank, N.A. — 10-K 12/31/2007 10.42 2/29/2008 †10.37 Amendment and Restatement of Harrah’s Entertainment, Inc. Executive Deferred Compensation Plan, effective August 3, 2007. — 10-Q 6/30/2007 10.69 8/9/2007 †10.38 Amendment and Restatement of Harrah’s Entertainment, Inc. Deferred Compensation Plan, effective as of August 3, 2007. — 10-Q 6/30/2007 10.70 8/9/2007 †10.39 Amendment and Restatement of Park Place Entertainment Corporation Executive Deferred Compensation Plan, effective as of August 3, 2007. — 10-Q 6/30/2007 10.71 8/9/2007 †10.40 Amendment and Restatement of Harrah’s Entertainment, Inc. Executive Supplemental Savings Plan, effective as of August 3, 2007. — 10-Q 6/30/2007 10.72 8/9/2007 †10.41 Amendment and Restatement of Harrah’s Entertainment, Inc. Executive Supplemental Savings Plan II, effective as of August 3, 2007. — 10-Q 6/30/2007 10.73 8/9/2007 †10.42 First Amendment to the Amendment and Restatement of Harrah’s Entertainment, Inc. Executive Supplemental Savings Plan II, effective as of February 9, 2009. — 8-K — 10.2 2/13/2009 10.43 Second Amended and Restated Loan Agreement dated as of August 31, 2010, among Harrah's Las Vegas Propco, LLC, Harrah's Atlantic City Propco, LLC, Rio Propco, LLC, Flamingo Las Vegas Propco, LLC, Harrah's Laughlin Propco, LLC, and Paris Las Vegas Propco, LLC, as Borrower, JPMorgan Chase Bank, N.A., Bank of America, N.A., Citibank, N.A., Credit Suisse AG, Cayman Islands Branch (f/k/a Credit Suisse, Cayman Islands Branch), Merrill Lynch Mortgage Lending, Inc., Goldman Sachs Mortgage Company, Morgan Stanley Mortgage Capital Holdings LLC, German American Capital Corporation, and Bank of America, N.A., as Collateral Agent. — 8-K — 10.1 9/3/2010 134 Incorporated by Reference Exhibit Number Exhibit Description Filed Herewith Form Period Ending Exhibit Filing Date 10.44 Second Amended and Restated First Mezzanine Loan Agreement dated as of August 31, 2010, among Harrah's Las Vegas Mezz 1, LLC, Harrah's Atlantic City Mezz 1, LLC, Rio Mezz 1, LLC, Flamingo Las Vegas Mezz 1, LLC, Harrah's Laughlin Mezz 1, LLC, and Paris Las Vegas Mezz 1, LLC, as Borrower, JPMorgan Chase Bank, N.A., Bank of America, N.A., Citibank, N.A., Credit Suisse AG, Cayman Islands Branch (f/k/a Credit Suisse, Cayman Islands Branch), Merrill Lynch Mortgage Lending, Inc., Goldman Sachs Mortgage Company, Blackstone Special Funding (Ireland), and Bank of America, N.A., as Collateral Agent. — 8-K — 10.2 9/3/2010 10.45 Second Amended and Restated Second Mezzanine Loan Agreement dated as of August 31, 2010, among Harrah's Las Vegas Mezz 2, LLC, Harrah's Atlantic City Mezz 2, LLC, Rio Mezz 2, LLC, Flamingo Las Vegas Mezz 2, LLC, Harrah's Laughlin Mezz 2, LLC, and Paris Las Vegas Mezz 2, LLC, as Borrower, JPMorgan Chase Bank, N.A., Bank of America, N.A., Citibank, N.A., Credit Suisse AG, Cayman Islands Branch (f/k/a Credit Suisse, Cayman Islands Branch), Merrill Lynch Mortgage Lending, Inc., Goldman Sachs Mortgage Company, Blackstone Special Funding (Ireland), and Bank of America, N.A., as Collateral Agent. — 8-K — 10.3 9/3/2010 10.46 Second Amended and Restated Third Mezzanine Loan Agreement dated as of August 31, 2010, among Harrah's Las Vegas Mezz 3, LLC, Harrah's Atlantic City Mezz 3, LLC, Rio Mezz 3, LLC, Flamingo Las Vegas Mezz 3, LLC, Harrah's Laughlin Mezz 3, LLC, and Paris Las Vegas Mezz 3, LLC, as Borrower, JPMorgan Chase Bank, N.A., Bank of America, N.A., Citibank, N.A., Credit Suisse AG, Cayman Islands Branch (f/k/a Credit Suisse, Cayman Islands Branch), Merrill Lynch Mortgage Lending, Inc., Goldman Sachs Mortgage Company, Blackstone Special Funding (Ireland), and Bank of America, N.A., as Collateral Agent. — 8-K — 10.4 9/3/2010 135 Incorporated by Reference Exhibit Number Exhibit Description Filed Herewith Form Period Ending Exhibit Filing Date 10.47 Second Amended and Restated Fourth Mezzanine Loan Agreement dated as of August 31, 2010, among Harrah's Las Vegas Mezz 4, LLC, Harrah's Atlantic City Mezz 4, LLC, Rio Mezz 4, LLC, Flamingo Las Vegas Mezz 4, LLC, Harrah's Laughlin Mezz 4, LLC, and Paris Las Vegas Mezz 4, LLC, as Borrower, JPMorgan Chase Bank, N.A., Bank of America, N.A., Citibank, N.A., Credit Suisse AG, Cayman Islands Branch (f/k/a Credit Suisse, Cayman Islands Branch), Merrill Lynch Mortgage Lending, Inc., Goldman Sachs Mortgage Company, Blackstone Special Funding (Ireland), and Bank of America, N.A., as Collateral Agent. — 8-K — 10.5 9/3/2010 10.48 Second Amended and Restated Fifth Mezzanine Loan Agreement dated as of August 31, 2010, among Harrah's Las Vegas Mezz 5, LLC, Harrah's Atlantic City Mezz 5, LLC, Rio Mezz 5, LLC, Flamingo Las Vegas Mezz 5, LLC, Harrah's Laughlin Mezz 5, LLC, and Paris Las Vegas Mezz 5, LLC, as Borrower, Citibank, N.A., Credit Suisse AG, Cayman Islands Branch (f/k/a Credit Suisse, Cayman Islands Branch), Goldman Sachs Mortgage Company, Blackstone Special Funding (Ireland), German American Capital Corporation, and Bank of America, N.A., as Collateral Agent. — 8-K — 10.6 9/3/2010 10.49 Second Amended and Restated Sixth Mezzanine Loan Agreement dated as of August 31, 2010, among Harrah's Las Vegas Mezz 6, LLC, Harrah's Atlantic City Mezz 6, LLC, Rio Mezz 6, LLC, Flamingo Las Vegas Mezz 6, LLC, Harrah's Laughlin Mezz 6, LLC, and Paris Las Vegas Mezz 6, LLC, as Borrower, Credit Suisse AG, Cayman Islands Branch (f/k/a Credit Suisse, Cayman Islands Branch), Goldman Sachs Mortgage Company, German American Capital Corporation, and Bank of America, N.A., as Collateral Agent. — 8-K — 10.7 9/3/2010 10.50 Second Amended and Restated Seventh Mezzanine Loan Agreement dated as of August 31, 2010, among Harrah's Las Vegas Mezz 7, LLC, Harrah's Atlantic City Mezz 7, LLC, Rio Mezz 7, LLC, Flamingo Las Vegas Mezz 7, LLC, Harrah's Laughlin Mezz 7, LLC, and Paris Las Vegas Mezz 7, LLC, as Borrower, Credit Suisse AG, Cayman Islands Branch (f/k/a Credit Suisse, Cayman Islands Branch), Goldman Sachs Mortgage Company, and Bank of America, N.A., as Collateral Agent. — 8-K — 10.8 9/3/2010 136 Incorporated by Reference Exhibit Number Exhibit Description Filed Herewith Form Period Ending Exhibit Filing Date 10.51 Second Amended and Restated Eighth Mezzanine Loan Agreement dated as of August 31, 2010, among Harrah's Las Vegas Mezz 8, LLC, Harrah's Atlantic City Mezz 8, LLC, Rio Mezz 8, LLC, Flamingo Las Vegas Mezz 8, LLC, Harrah's Laughlin Mezz 8, LLC, and Paris Las Vegas Mezz 8, LLC, as Borrower, Goldman Sachs Mortgage Company, and Bank of America, N.A., as Collateral Agent. — 8-K — 10.9 9/3/2010 10.52 Second Amended and Restated Ninth Mezzanine Loan Agreement dated as of August 31, 2010, among Harrah's Las Vegas Mezz 9, LLC, Harrah's Atlantic City Mezz 9, LLC, Rio Mezz 9, LLC, Flamingo Las Vegas Mezz 9, LLC, Harrah's Laughlin Mezz 9, LLC, and Paris Las Vegas Mezz 9, LLC, as Borrower, Goldman Sachs Mortgage Company, and Bank of America, N.A., as Collateral Agent. — 8-K — 10.10 9/3/2010 10.53 Note Sales Agreement dated as of August 31, 2010, among each first mezzanine lender, each second mezzanine lender, each third mezzanine lender, fourth mezzanine lender, fifth mezzanine lender, sixth mezzanine lender, seventh mezzanine lender, eighth mezzanine lender and ninth mezzanine lender, and specified mezzanine lender, Harrah's Entertainment, Inc., each Mortgage Loan Borrower, each Mezzanine Borrower and each Operating Company. — 8-K — 10.11 9/3/2010 10.54 Form of Management Agreement entered into between each Mortgage Loan Borrower and its respective Operating Company. — 8-K — 10.12 9/3/2010 10.55 Form of Amended and Restated Operating Lease (Hotel Component) entered into between each Mortgage Loan Borrower, its respective Operating Company and its respective Management Company. — 8-K — 10.13 9/3/2010 10.56 Form of Amended and Restated Operating Lease (Casino Component) entered into between each Mortgage Loan Borrower, its respective Operating Company and its respective Management Company. — 8-K — 10.14 9/3/2010 137 Incorporated by Reference Exhibit Number Exhibit Description Filed Herewith Form Period Ending Exhibit Filing Date 10.57 Agreement Among Mortgage Noteholders, dated August 31, 2010, among JPMorgan Chase Bank, N.A., as Note A-1 Holder, Bank of America, N.A., as Note A-2 Holder, Citibank, N.A., as Note A-3 Holder, Credit Suisse, Cayman Islands Branch, as Note A-4 Holder, German American Capital Corporation, as Note A-5 Holder, Merrill Lynch Mortgage Lending, Inc., as Note A-6 Holder, JP Morgan Chase Bank, N.A., as Note A-7 Holder, Goldman Sachs Mortgage Company, as Note A-9 Holder, Bank of America, N.A., as Collateral Agent, and Bank of America, N.A. as Servicer. — 8-K — 10.15 9/3/2010 10.58 Agreement Among First Mezzanine Noteholders, dated August 31, 2010, among JPMorgan Chase Bank, N.A., Bank of America, N.A., Citibank, N.A., Credit Suisse AG, Cayman Islands Branch (f/k/a Credit Suisse, Cayman Islands Branch), Merrill Lynch Mortgage Lending, Inc., Goldman Sachs Mortgage Company, Blackstone Special Funding (Ireland), and Bank of America, N.A., as Collateral Agent. — 8-K — 10.16 9/3/2010 10.59 Agreement Among Second Mezzanine Noteholders, dated August 31, 2010, among JPMorgan Chase Bank, N.A., Bank of America, N.A., Citibank, N.A., Credit Suisse AG, Cayman Islands Branch (f/k/a Credit Suisse, Cayman Islands Branch), Merrill Lynch Mortgage Lending, Inc., Goldman Sachs Mortgage Company, Blackstone Special Funding (Ireland), and Bank of America, N.A., as Collateral Agent. — 8-K — 10.17 9/3/2010 10.60 Agreement Among Third Mezzanine Noteholders, dated August 31, 2010, among JPMorgan Chase Bank, N.A., Bank of America, N.A., Citibank, N.A., Credit Suisse AG, Cayman Islands Branch (f/k/a Credit Suisse, Cayman Islands Branch), Merrill Lynch Mortgage Lending, Inc., Goldman Sachs Mortgage Company, Blackstone Special Funding (Ireland), and Bank of America, N.A., as Collateral Agent. — 8-K — 10.18 9/3/2010 10.61 Agreement Among Fourth Mezzanine Noteholders, dated August 31, 2010, among JPMorgan Chase Bank, N.A., Bank of America, N.A., Citibank, N.A., Credit Suisse AG, Cayman Islands Branch (f/k/a Credit Suisse, Cayman Islands Branch), Merrill Lynch Mortgage Lending, Inc., Goldman Sachs Mortgage Company, Blackstone Special Funding (Ireland), and Bank of America, N.A., as Collateral Agent. (Incorporated by reference to the exhibit filed with the Company's Current Report on Form 8-K filed on September 3, 2010.) — 8-K — 10.19 9/3/2010 138 Incorporated by Reference Exhibit Number Exhibit Description Filed Herewith Form Period Ending Exhibit Filing Date 10.62 Agreement Among Fifth Mezzanine Noteholders, dated August 31, 2010, among Citibank, N.A., Credit Suisse AG, Cayman Islands Branch (f/k/a Credit Suisse, Cayman Islands Branch), Goldman Sachs Mortgage Company, Blackstone Special Funding (Ireland), German American Capital Corporation, and Bank of America, N.A., as Collateral Agent. — 8-K — 10.20 9/3/2010 10.63 Agreement Among Sixth Mezzanine Noteholders, dated August 31, 2010, among Credit Suisse AG, Cayman Islands Branch (f/k/a Credit Suisse, Cayman Islands Branch), Goldman Sachs Mortgage Company, German American Capital Corporation, and Bank of America, N.A., as Collateral Agent. — 8-K — 10.21 9/3/2010 10.64 Agreement Among Seventh Mezzanine Noteholders, dated August 31, 2010, among Credit Suisse AG, Cayman Islands Branch (f/k/a Credit Suisse, Cayman Islands Branch), Goldman Sachs Mortgage Company, and Bank of America, N.A., as Collateral Agent. — 8-K — 10.22 9/3/2010 10.65 Intercreditor Agreement, dated August 31, 2010, among the senior lender, first mezzanine lender, second mezzanine lender, third mezzanine lender, fourth mezzanine lender, fifth mezzanine lender, sixth mezzanine lender, seventh mezzanine lender, eighth mezzanine lender, and ninth mezzanine lender. — 8-K — 10.23 9/3/2010 †10.66 Form of Indemnification Agreement entered into by Caesars Entertainment Corporation and each of its directors and executive officers. — S-1 — 10.75 11/16/2010 10.67 Irrevocable Proxy of Hamlet Holdings LLC, dated November 22, 2010 — 8-K — 10.1 11/24/2010 10.68 Amended and Restated Management Investors Rights Agreement, dated November 22, 2010 — 8-K — 10.2 11/24/2010 10.69 Credit Agreement dated as of April 25, 2011 between the Company, the Borrowers, the lenders (as defined therein) party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent for the lenders, for the financing of the Octavius Tower and Project Linq development. — 8-K — 10.1 4/27/2011 139 Incorporated by Reference Exhibit Number Exhibit Description Filed Herewith Form Period Ending Exhibit Filing Date 10.70 Completion Guarantee dated as of April 25, 2011 by the Company in favor of JPMorgan Chase Bank, N.A., as administrative agent and collateral agent for the lenders (as defined therein), for the financing of the Octavius Tower and Project Linq development. — 8-K — 10.2 4/27/2011 10.71 Disbursement Agreement dated as of April 25, 2011 between the Borrowers, JPMorgan Chase Bank, N.A. as disbursement agent and agent and Fulcrum LLC as construction consultant, for the financing of the Octavius Tower and Project Linq development. — 8-K — 10.3 4/27/2011 10.72 Amended and Restated Credit Agreement, Dated as of November 14, 2012, among Caesars Entertainment Operating Company, Inc., as Borrower, and Caesars Entertainment Corporation, as Lender. X †10.73 Caesars Entertainment Corporation Management Equity Incentive Plan, as amended and restated on November 29, 2011. — S-1/A — 10.78 12/28/2011 †10.74 Employment Agreement, made as of January 28, 2008, and amended on March 13, 2009, by and between Harrah’s Entertainment, Inc. and Gary W. Loveman. — 10-K 12/31/2008 10.16 3/17/2009 †10.75 Form of Stock Option Grant Agreement dated April 16, 2012 between Caesars Entertainment Corporation and Gary W. Loveman. — 10-Q 3/31/2012 10.96 5/9/2012 †10.76 Form of Caesars Entertainment Corporation Management Equity Incentive Plan Stock Option Grant Agreement — SC-TO-I — (d)(7) 7/25/2012 †10.77 Form of Amendment to Caesars Entertainment Corporation Management Equity Incentive Plan Stock Option Grant Agreement — SC-TO-I — (d)(8) 7/25/2012 †10.78 Caesars Entertainment Corporation 2012 Performance Incentive Plan. — S-1/A — 10.89 2/2/2012 †10.79 Amendment No.1 to the Caesars Entertainment Corporation 2012 Performance Incentive Plan — 8-K — 10.1 7/25/2012 †10.80 Form of Caesars Entertainment Corporation 2012 Performance Incentive Plan Nonqualified Option Award Agreement — SC-TO-I — (d)(3) 7/25/2012 140 Incorporated by Reference Exhibit Number Exhibit Description Filed Herewith Form Period Ending Exhibit Filing Date †10.81 Form of Caesars Entertainment Corporation 2012 Performance Incentive Plan Nonqualified Option Award Agreement (Replacement Options) — SC-TO-I — (d)(4) 7/25/2012 †10.82 Form of Caesars Entertainment Corporation 2012 Performance Incentive Plan Nonqualified Option Award Agreement (Replacement Options Granted to Gary W. Loveman) — SC-TO-I — (d)(5) 7/25/2012 †10.83 Form of Employment Agreement between Caesars Entertainment Operating Company, Inc., and Jonathan S. Halkyard, Thomas M. Jenkin, and John W. R. Payne. — 8-K — 10.1 1/9/2012 †10.84 Form of Caesars Entertainment 2012 Performance Incentive Plan Restricted Share Award Agreement X †10.85 Employment Agreement made as of November 14, 2012, by and between Caesars Entertainment Operating Company, Inc. and Donald Colvin. X †10.86 Employment Agreement made as of August 8, 2012, by and between Caesars Entertainment Operating Company, Inc. and Diane Wilfong X †10.87 Employment Agreement made as of April 2, 2009 by and between Harrah's Operating Company, Inc. and Timothy Donovan. X 10.88 Form of Release and Contribution Agreement, dated as of January 25, 2012, by and among Caesars Entertainment Corporation, Co-Invest Hamlet Holdings, Series LLC, Co-Invest Hamlet Holdings B, LLC and the Participating Co-Investors listed on Schedule I. — S-1/A — 10.90 2/2/2012 10.89 Form of Acknowledgment to the Services Agreement among Caesars Entertainment Corporation, Apollo Management VI, L.P., Apollo Alternative Assets, L.P. and TPG Capital, L.P. — S-1/A — 10.92 2/2/2012 †10.90 2009 Senior Executive Incentive Plan, amended and restated December 7, 2012. X †10.91 Caesars Entertainment Corporation Omnibus Incentive Plan, dated November 14, 2012 X 141 Incorporated by Reference Exhibit Number Exhibit Description Filed Herewith Form Period Ending Exhibit Filing Date 10.92 Equity Interest Purchase Agreement with Exhibits A-F with Penn National Gaming, Inc., Caesars Entertainment Operating Company, Inc. , Harrah’s Maryland Heights Operating Company, Players Maryland Heights Nevada, LLC and Harrah’s Maryland Heights, LLC, dated May 7, 2012. — 10-Q 6/30/2012 10.102 8/8/2012 10.93 Joinder and Supplement to the Intercreditor Agreement, dated as of October 5, 2012, by and among U.S. Bank National Association, as new trustee, U.S. Bank National Association, as second priority agent, Bank of America, N.A., as credit agreement agent and U.S. Bank National Association, as other first priority lien obligations agent. — 8-K — 10.2 10/10/2012 10.94 Other First Lien Secured Party Consent to the Collateral Agreement, dated as of October 5, 2012, by U.S. Bank National Association, as agent or trustee for persons who shall become “Secured Parties” under the Collateral Agreement dated as of January 28, 2008, as amended and restated as of June 10, 2009. — 8-K — 10.3 10/10/2012 10.95 Other First Lien Secured Party Consent to the Guaranty and Pledge Agreement, dated as of October 5, 2012, by U.S. Bank National Association, as agent or trustee for persons who shall become “Secured Parties” under the Guaranty and Pledge Agreement dated as of January 28, 2008, as amended and restated as of June 10, 2009. — 8-K — 10.4 10/10/2012 10.96 Escrow Agreement, dated as of December 13, 2012, by and among Caesars Operating Escrow LLC, Caesars Escrow Corporation, U.S. Bank National Association, as escrow agent and securities intermediary, and U.S. Bank National Association, as trustee. — 8-K — 10.1 12/13/2012 12 Computation of Ratios X 14 Amended and Restated Code of Business Conduct and Ethics, amended February 21, 2013 X 21 List of Subsidiaries of Caesars Entertainment Corporation X 23 Consent of Deloitte & Touche LLP, independent registered public accounting firm. X _______________ 142 Incorporated by Reference Exhibit Number Exhibit Description Filed Herewith Form Period Ending Exhibit Filing Date 31.1 Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated March 15, 2013. X 31.2 Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated March 15, 2013. X 32.1 Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated March 15, 2013. X 32.2 Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated March 15, 2013. X 99.1 Supplemental Discussion of Caesars Entertainment Operating Company, Inc. Financial Information X 99.2 Supplemental Discussion of Caesars Entertainment's Commercial Mortgage-Backed Securities Related Properties Financial Information X 99.3 Gaming and Regulatory Overview X ***101 The following financial statements from the Company’s Form 10-K for the year ended December 31, 2012, formatted in XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Comprehensive Loss, (iii) Consolidated Statement of Stockholders’ Equity (iv) Consolidated Statements of Cash Flows (v) Notes to Consolidated Financial Statements. — — — — — * Filed by Park Place Entertainment Corporation. ** Filed by Harrah's Entertainment, Inc. *** Furnished herewith. † Denotes a management contract or compensatory plan or arrangement. Schedule I CONDENSED FINANCIAL INFORMATION OF REGISTRANT PARENT COMPANY ONLY CAESARS ENTERTAINMENT CORPORATION CONDENSED BALANCE SHEETS (In millions) See accompanying notes to condensed financial information. 143 As of December 31, 2012 2011 Assets Current assets Cash and cash equivalents $ 7.4 $ 3.9 Receivables, less allowance for doubtful accounts 0.1 — Prepayments and other current assets 5.0 — Intercompany receivables 29.6 15.7 Total current assets 42.1 19.6 Investments in subsidiaries — 535.8 Deferred charges and other 7.5 5.0 Intercompany receivables 563.1 469.0 $ 612.7 $ 1,029.4 Liabilities and Stockholders’ (Deficit)/Equity Current liabilities Accounts payable $ 3.9 $ 0.2 Accrued expenses 3.7 7.5 Intercompany payables 15.9 15.0 Total current liabilities 23.5 22.7 Accumulated losses of subsidiaries in excess of investment 925.4 — Deferred credits and other 4.1 — Intercompany payables 55.0 — 1,008.0 22.7 Total stockholders’ (deficit)/equity (395.3 ) 1,006.7 $ 612.7 $ 1,029.4 Schedule I CONDENSED FINANCIAL INFORMATION OF REGISTRANT PARENT COMPANY ONLY CAESARS ENTERTAINMENT CORPORATION CONDENSED STATEMENT OF COMPREHENSIVE LOSS (In millions) See accompanying notes to condensed financial information. 144 Year Ended December 31, 2012 2011 2010 Net revenues $ — $ — $ — Operating expenses Write-downs, reserves, and project opening costs, net of recoveries 15.0 — — Loss on interests in subsidiaries 1,464.3 693.4 816.5 Corporate expense 28.2 22.7 23.3 Acquisition and integration costs — 0.1 0.8 Total operating expenses 1,507.5 716.2 840.6 Loss from operations (1,507.5 ) (716.2 ) (840.6 ) Interest expense, net of interest capitalized (1.0 ) — (3.1 ) Other income, including interest income 18.3 25.5 4.5 Loss from operations before income taxes (1,490.2 ) (690.7 ) (839.2 ) Benefit for income taxes 9.1 3.1 8.1 Net loss (1,481.1 ) (687.6 ) (831.1 ) Other comprehensive income/(loss), net of income taxes — — — Comprehensive loss $ (1,481.1 ) $ (687.6 ) $ (831.1 ) Schedule I CONDENSED FINANCIAL INFORMATION OF REGISTRANT PARENT COMPANY ONLY CAESARS ENTERTAINMENT CORPORATION CONDENSED STATEMENT OF CASH FLOWS (In millions) See accompanying notes to condensed financial information. 145 Year Ended December 31, 2012 2011 2010 Cash flows from operating activities $ 258.6 $ 182.9 $ 753.9 Cash flows from investing activities Payments to acquire businesses, net of transaction costs and cash acquired — (123.5 ) — Purchase of additional interest in subsidiary (232.5 ) — — Other (0.8 ) — — Cash flows used in investing activities (233.3 ) (123.5 ) — Cash flows from financing activities Issuance of common stock, net of fees 17.4 — — Other — (1.7 ) (1.6 ) Transfer to affiliates (39.2 ) (189.8 ) (739.0 ) Cash flows provided by financing activities (21.8 ) (191.5 ) (740.6 ) Net increase/(decrease) in cash and cash equivalents 3.5 (132.1 ) 13.3 Cash and cash equivalents, beginning of period 3.9 136.0 122.7 Cash and cash equivalents, end of period $ 7.4 $ 3.9 $ 136.0 Schedule I CONDENSED FINANCIAL INFORMATION OF REGISTRANT PARENT COMPANY ONLY CAESARS ENTERTAINMENT CORPORATION NOTES TO CONDENSED FINANCIAL INFORMATION These condensed parent company financial statements have been prepared in accordance with Rule 12-04, Schedule 1 of Regulation S-X, as the restricted net assets of Caesars Entertainment Corporation and its subsidiaries exceed 25% of the consolidated net assets of Caesars Entertainment Corporation and its subsidiaries (the “Company”). This information should be read in conjunction with the company's consolidated financial statements included elsewhere in this filing. Certain of the Company's subsidiaries have restrictions on their ability to pay dividends or make intercompany loans and advances pursuant to financing arrangements and regulatory restrictions. The amount of restricted net assets the Company's consolidated subsidiaries held at December 31, 2012 and 2011 was approximately $1.2 billion and $1.1 billion , respectively. Such restrictions are on net assets of Caesars Entertainment Corporation and its subsidiaries. The amount of restricted net assets in the Company's unconsolidated subsidiaries was not material to the financial statements. For a discussion of the Company's commitments, contingencies and long term obligations under its senior secured credit facility, see Notes 8 and 15 of the Company's consolidated financial statements. 146 1. Background and basis of presentation 2. Restricted net assets of subsidiaries 3. Commitments, contingencies and long-term obligations Schedule II CAESARS ENTERTAINMENT CORPORATION CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS (In millions) ____________________ 147 Additions Charged Balance at to Costs Charged Deductions Balance Beginning and to Other from at End Description of Period Expenses Accounts Reserves of Period YEAR ENDED DECEMBER 31, 2012 Allowance for doubtful accounts Current $ 202.2 $ 66.7 $ — $ (67.2 ) (a) $ 201.7 Long-term $ 0.3 $ — $ — $ (0.2 ) $ 0.1 Liability to sellers under acquisition agreement (b) $ 1.1 $ — $ — $ (0.1 ) $ 1.0 YEAR ENDED DECEMBER 31, 2011 Allowance for doubtful accounts Current $ 216.2 $ 49.3 $ — $ (63.3 ) (a) $ 202.2 Long-term $ 0.3 $ — $ — $ — $ 0.3 Liability to sellers under acquisition agreement (b) $ 1.2 $ — $ — $ (0.1 ) $ 1.1 YEAR ENDED DECEMBER 31, 2010 Allowance for doubtful accounts Current $ 207.0 $ 65.9 $ — $ (56.7 ) (a) $ 216.2 Long-term $ 0.3 $ — $ — $ — $ 0.3 Liability to sellers under acquisition agreement (b) $ 1.4 $ — $ — $ (0.2 ) $ 1.2 (a) Uncollectible accounts written off, net of amounts recovered. (b) We acquired Players International, Inc., (“Players”) in March 2000 . In 1995 , Players acquired a hotel and land adjacent to its riverboat gaming facility in Lake Charles, Louisiana, for cash plus future payments to the seller based on the number of passengers boarding the riverboat casinos during a defined term. In accordance with the guidance provided by ASC Topic 805 regarding the recognition of liabilities assumed in a business combination accounted for as a purchase, Players estimated the net present value of the future payments to be made to the sellers and recorded that amount as a component of the total consideration paid to acquire these assets. Our recording of this liability in connection with the purchase price allocation process following the Players acquisition was originally reported in 2000 . Our casino operations in Lake Charles sustained significant damage in late third quarter 2005 as a result of Hurricane Rita. As a result of hurricane damage, and upon the Company’s subsequent decision to scale back operations in Lake Charles and ultimately sell the property, the current and long-term portions of this obligation were written down in fourth quarter 2005 ; the credit was included in Discontinued operations on our Consolidated Statements of Comprehensive Loss. We sold Harrah’s Lake Charles in fourth quarter 2006 . Prior to the sale, the current and long-term portions of this obligation were included in Liabilities held for sale on our Consolidated Balance Sheets. The remaining long-term portion of this liability is included in Deferred credits and other on our Consolidated Balance Sheets; the current portion of this obligation is included in Accrued expenses on our Consolidated Balance Sheets. SIGNATURES Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated. CAESARS ENTERTAINMENT CORPORATION March 15, 2013 By: / S / G ARY W. L OVEMAN Gary W. Loveman Chairman of the Board, Chief Executive Officer, and President Signature Title Date /s/ JEFFREY BENJAMIN Director March 15, 2013 Jeffrey Benjamin /s/ DAVID BONDERMAN Director March 15, 2013 David Bonderman /s/ JEFFREY T. HOUSENBOLD Director March 15, 2013 Jeffrey Housenbold /s/ KELVIN DAVIS Director March 15, 2013 Kelvin Davis /s/ GARY W. LOVEMAN Director, Chairman of the Board, March 15, 2013 Gary W. Loveman Chief Executive Officer and President /s/ KARL PETERSON Director March 15, 2013 Karl Peterson /s/ ERIC PRESS Director March 15, 2013 Eric Press /s/ MARC ROWAN Director March 15, 2013 Marc Rowan /s/ DAVID SAMBUR Director March 15, 2013 David Sambur /s/ LYNN C. SWANN Director March 15, 2013 Lynn C. Swann /s/ CHRISTOPHER J. WILLIAMS Director March 15, 2013 Christopher J. Williams /s/ DONALD COLVIN Executive Vice President and Chief March 15, 2013 Donald Colvin Financial Officer 148 /s/ DIANE E. WILFONG Senior Vice President, Controller, and March 15, 2013 Diane E. Wilfong Chief Accounting Officer Exhibit 10.72 $1,000,000,000 AMENDED AND RESTATED CREDIT AGREEMENT Dated as of November 14, 2012, Among CAESARS ENTERTAINMENT OPERATING COMPANY, INC., as Borrower, and CAESARS ENTERTAINMENT CORPORATION, as Lender AMENDED AND RESTATED CREDIT AGREEMENT dated as of November 14, 2012 (this “ Agreement ”), among CAESARS ENTERTAINMENT OPERATING COMPANY, INC. (f/k/a Harrah’s Operating Company, Inc.), a Delaware corporation (the “ Borrower ”), and CAESARS ENTERTAINMENT CORPORATION (f/k/a Harrah’s Entertainment, Inc.), a Delaware corporation (the “ Lender ”). WHEREAS, the Borrower has requested the Lender to extend credit in the form of revolving loans from time to time prior to the Maturity Date in an aggregate principal amount not to exceed $1,000,000,000; WHEREAS, the Lender may, but is not obligated, to extend such credit in the form of revolving loans to the Borrower from time to time; and WHEREAS, this Agreement has been duly adopted by the Boards of Directors (or committee delegated by the Board of Directors authority to approve this type of arrangement) of each of the Borrower and the Lender. NOW, THEREFORE, the Lender is willing to extend such credit to the Borrower on the terms and subject to the conditions set forth herein. Accordingly, the parties hereto agree as follows: ARTICLE I Definitions SECTION 1.01 Defined Terms . As used in this Agreement, the following terms shall have the meanings specified below: “ Affiliate ” shall mean, when used with respect to a specified person, another person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the person specified. “ Agreement ” shall have the meaning assigned to such term in the introductory paragraph of this Agreement. “ Applicable Margin ” shall mean for any day with respect to any Loan, 3.00% per annum. “ Availability Period ” shall mean the period from and including the Closing Date to but excluding the earlier of the Maturity Date and the date of termination of this Agreement. “ BBA LIBOR ” shall mean, for any Interest Period, the rate per annum equal to the British Bankers Association LIBOR Rate, as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated by the Lender from time to time) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for deposits in the relevant currency (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period. “ Board ” shall mean the Board of Governors of the Federal Reserve System of the United States of America. “ Board of Directors ” shall mean, as to any person, the board of directors or other governing body of such person, or if such person is owned or managed by a single entity, the board of directors or other governing body of such entity. “ Borrower ” shall have the meaning assigned to such term in the introductory paragraph of this Agreement. “ Borrowing ” shall mean a group of Loans made on a single date and as to which a single Interest Period is in effect. “ Borrowing Minimum ” shall mean $1,000,000. “ Borrowing Multiple ” shall mean $500,000. “ Borrowing Request ” shall mean a request by a Borrower in accordance with the terms of Section 2.03. “ Business Day ” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the laws of, or are in fact closed in, New York City or Las Vegas, Nevada. “ Capital Lease Obligations ” of any person shall mean the obligations of such person to pay rent or other amounts under any lease of (or other similar arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such person under GAAP and, for purposes hereof, the amount of such obligations at any time shall be the capitalized amount thereof at such time determined in accordance with GAAP. “ Change in Law ” shall mean (a) the adoption of any law, rule or regulation after the Closing Date, (b) any change in law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the Closing Date or (c) compliance by the Lender (or, for purposes of Section 2.09(b), by any lending office of the Lender or by the Lender’s holding company, if any) with any written request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the Closing Date. “ Charges ” shall have the meaning assigned to such term in Section 6.09. “ Closing Date ” shall mean November 14, 2012. “ Code ” shall mean the Internal Revenue Code of 1986, as amended from time to time and the regulations promulgated and rulings issued thereunder. “ Control ” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a person, whether through the ownership of voting securities, by contract or otherwise, and “ Controlling ” and “ Controlled ” shall have meanings correlative thereto. “ Credit Event ” shall have the meaning assigned to such term in Article IV. “ Default ” shall mean any event or condition which, but for the giving of notice, lapse of time or both would constitute an Event of Default. “ Dollars ” or “ $ ” shall mean lawful money of the United States of America. “ environment ” shall mean ambient and indoor air, surface water and groundwater (including potable water, navigable water and wetlands), the land surface or subsurface strata, natural resources such as flora and fauna, the workplace or as otherwise defined in any Environmental Law. “ Environmental Laws ” shall mean all applicable laws (including common law), rules, regulations, codes, ordinances, orders, decrees or judgments, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the generation, management, Release or threatened Release of, or exposure to, any Hazardous Material or to occupational health and safety matters (to the extent relating to the environment or Hazardous Materials). “ Equity Interests ” of any person shall mean any and all shares, interests, rights to purchase or otherwise acquire, warrants, options, participations or other equivalents of or interests in (however designated) equity or ownership of such person, including any preferred stock, any limited or general partnership interest and any limited liability company membership interest, and any securities or other rights or interests convertible into or exchangeable for any of the foregoing. “ ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as the same may be amended from time to time and any final regulations promulgated and the rulings issued thereunder. “ ERISA Affiliate ” shall mean any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code, or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code. “ ERISA Event ” shall mean (a) any Reportable Event or the requirements of Section 4043(b) of ERISA apply with respect to a Plan; (b) the existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan, the failure to make by its due date a required installment under Section 412(m) of the Code with respect to any Plan or the failure to make any required contribution to a Multiemployer Plan; (d) the incurrence by the Borrower or any ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination of any Plan or Multiemployer Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or to appoint a trustee to administer any Plan under Section 4042 of ERISA; (f) the incurrence by the Borrower or any ERISA Affiliate of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower, a Subsidiary or any ERISA Affiliate of any notice, concerning the impending imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA; (h) the conditions for imposition of a lien under Section 302(f) of ERISA shall have been met with respect to any Plan; or (i) the adoption of an amendment to a Plan requiring the provision of security to such Plan pursuant to Section 307 of ERISA. “ Event of Default ” shall have the meaning assigned to such term in Section 5.01. “ Excluded Taxes ” shall mean, with respect to the Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) income taxes imposed on (or measured by) its net income (or franchise taxes imposed in lieu of net income taxes) by the United States of America (or any state or locality thereof) or the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of the Lender, in which its applicable lending office is located or any other jurisdiction as a result of such recipient engaging in a trade or business in such jurisdiction for tax purposes (other than a trade or business deemed to arise by virtue of entering into this Agreement, any other Loan Document or any of the transactions contemplated under such documents), (b) any branch profits tax or any similar tax that is imposed by any jurisdiction described in clause (a) above, and (c) in the case of the Lender making a Loan to the Borrower, any withholding tax (including any backup withholding tax) imposed by the United States federal government (or a jurisdiction as a result of such Lender being organized or having its principal office or applicable lending office in such jurisdiction or as a result of such Lender engaging in a trade or business in such jurisdiction for tax purposes (other than a trade or business deemed to arise by virtue of entering into this Agreement, any other Loan Document or any of the transactions contemplated under such documents)) that (x) is in effect and would apply to amounts payable hereunder to the Lender at the time the Lender becomes a party to such Loan to the Borrower (or designates a new lending office, except to the extent that such Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 2.10(a) or Section 2.10(c)) or (y) is attributable to the Lender’s failure to comply with Section 2.10(d) or Section 2.10(e) with respect to such Loan. “ Financial Officer ” of any person shall mean the Chief Financial Officer, principal accounting officer, Treasurer, Assistant Treasurer or Controller of such person. “ Foreign Subsidiary ” shall mean any Subsidiary that is incorporated or organized under the laws of any jurisdiction other than the United States of America, any State thereof or the District of Columbia. “ GAAP ” shall mean generally accepted accounting principles in effect from time to time in the United States, applied on a consistent basis, subject to the provisions of Section 1.02; provided that any reference to the application of GAAP in Sections 3.10(b) and 3.20 to a Foreign Subsidiary (and not as a consolidated Subsidiary of the Borrower) shall mean generally accepted accounting principles in effect from time to time in the jurisdiction of organization of such Foreign Subsidiary. “ Gaming Authority ” means, in any jurisdiction in which the Borrower or any of its subsidiaries manages or conducts any casino, gaming business or activities, the applicable gaming board, commission, or other governmental gaming regulatory body or agency which (a) has, or may at any time after the Closing Date have, jurisdiction over the gaming activities at the Property or any successor to such authority or (b) is, or may at any time after the Closing Date be, responsible for interpreting, administering and enforcing the Gaming Laws. “ Gaming Laws ” means all applicable constitutions, treaties, laws, rates, regulations and orders and statutes pursuant to which any Gaming Authority possesses regulatory, licensing or permit authority over gaming, gambling or casino activities and all rules, rulings, orders, ordinances, regulations of any Gaming Authority applicable to the gambling, casino, gaming businesses or activities of the Borrower or any of its subsidiaries in any jurisdiction, as in effect from time to time, including the policies, interpretations and administration thereof by the Gaming Authorities. “ Governmental Authority ” shall mean any federal, state, local or foreign court or governmental agency, authority, instrumentality or regulatory or legislative body. “ Hazardous Materials ” shall mean all pollutants, contaminants, wastes, chemicals, materials, substances and constituents, including, without limitation, explosive or radioactive substances or petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls or radon gas, of any nature subject to regulation or which can give rise to liability under any Environmental Law. “ Indebtedness ” of any person shall mean (a) all obligations of such person for borrowed money, (b) all obligations of such person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such person issued or assumed as the deferred purchase price of property or services (other than such obligations accrued in the ordinary course), to the extent the same would be required to be shown as a long-term liability on a balance sheet prepared in accordance with GAAP, (d) all Capital Lease Obligations of such person, (e) all net payments that such person would have to make in the event of an early termination, on the date Indebtedness of such person is being determined, in respect of outstanding Swap Agreements, (f) the principal component of all obligations, contingent or otherwise, of such person as an account party in respect of letters of credit, (g) the principal component of all obligations of such person in respect of bankers’ acceptances and (h) all guarantees by such person of Indebtedness described in clauses (a) to (g) above. “ Indemnified Taxes ” shall mean all Taxes other than Excluded Taxes. “ Interest Payment Date ” means the last Business Day of each March, June, September and December of each year and the Maturity Date. “ Interest Period ” means, as to each Eurocurrency Loan, the period commencing on the date such Eurocurrency Loan is disbursed or converted to or continued as a Eurocurrency Loan and ending on the date one, two, three or six months (or nine or twelve months if agreed to by the Lender or such period of shorter than one month as may be consented to by the Lender) thereafter, as selected by the Borrower; provided that: (a) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day; (b) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and (c) no Interest Period for any Loan shall extend beyond the maturity date of such Loan. Interest shall accrue from and including the first day of an Interest Period to but excluding the last day of such Interest Period. “ Lender ” shall have the meaning assigned to such term in the introductory paragraph hereto. “ lending office ” shall mean the applicable branch, office or Affiliate of Lender designated by Lender to make Loans. “ License Revocation ” means the revocation, failure to renew or suspension of, or the appointment of a receiver, supervisor, conservator or similar official with respect to, any casino, gambling or gaming license issued by any Gaming Authority covering any casino or gaming facility of the Borrower or any of its Subsidiaries. “ Lien ” shall mean, with respect to any asset, (a) any mortgage, preferred mortgage, deed of trust, lien, notice of claim of lien, hypothecation, pledge, charge, security interest or similar encumbrance in or on such asset and (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset; provided that in no event shall an operating lease or an agreement to sell be deemed to constitute a Lien. “ Liquor Authorities ” means, in any jurisdiction in which the Borrower or any of its Subsidiaries sells and distributes liquor, the applicable alcoholic beverage commission or other Governmental Authority responsible for interpreting, administering and enforcing the Liquor Laws. “ Liquor Laws ” means the laws, rules, regulations and orders applicable to or involving the sale and distribution of liquor by the Borrower or any of its Subsidiaries in any jurisdiction, as in effect from time to time, including the policies, interpretations and administration thereof by the applicable Liquor Authorities. “ Loan Documents ” shall mean this Agreement and any Note issued under Section 2.06(d). “ Loans ” shall mean loans made by the Lender pursuant to Section 2.01. “ Local Time ” shall mean Las Vegas, Nevada local time (daylight or standard, as applicable). “ Margin Stock ” shall have the meaning assigned to such term in Regulation U. “ Material Adverse Effect ” shall mean a material adverse effect on the business, property, operations or condition of the Borrower and its Subsidiaries, taken as a whole, or the validity and enforceability of any of the material Loan Documents or the rights and remedies of the Lender thereunder. “ Material Indebtedness ” shall mean Indebtedness (other than Loans) of any one or more of the Borrower or any Subsidiary in an aggregate principal amount exceeding $150 million. “ Maturity Date ” shall mean November 14, 2017. “ Maximum Rate ” shall have the meaning assigned to such term in Section 6.09. “ Multiemployer Plan ” shall mean a multiemployer plan as defined in Section 4001(a)(3) of ERISA to which the Borrower or any Subsidiary or any ERISA Affiliate (other than one considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Code Section 414) is making or accruing an obligation to make contributions, or has within any of the preceding six plan years made or accrued an obligation to make contributions. “ New York Courts ” shall have the meaning assigned to such term in Section 6.15. “ Note ” shall have the meaning assigned to such term in Section 2.06(d). “ Obligations ” shall mean (a) the due and punctual payment by the Borrower of (i) the unpaid principal of and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Loans made to the Borrower, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise, and (ii) all other monetary obligations of the Borrower to Lender under this Agreement and the other Loan Documents, including obligations to pay fees, expense reimbursement obligations and indemnification obligations, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) and (b) the due and punctual performance of all other obligations of the Borrower under or pursuant to this Agreement and the other Loan Documents. “ Other Taxes ” shall mean any and all present or future stamp or documentary taxes or any other excise, transfer, sales, property, intangible, mortgage recording, or similar taxes, charges or levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, the Loan Documents, and any and all interest and penalties related thereto (but not Excluded Taxes). “ Outstanding Amount ” means with respect to any Loans on any date, the amount of the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of such Loans occurring on such date. “ PBGC ” shall mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA. “ person ” shall mean any natural person, corporation, business trust, joint venture, association, company, partnership, limited liability company or government, individual or family trusts, or any agency or political subdivision thereof. “ Plan ” shall mean any employee pension benefit plan (other than a Multiemployer Plan) that is, (i) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and (ii) sponsored or maintained (at the time of determination or at any time within the five years prior thereto) by the Borrower or any ERISA Affiliate, and (iii) in respect of which the Borrower, any Subsidiary or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA. “ Regulation U ” shall mean Regulation U of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof. “ Regulation X ” shall mean Regulation X of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof. “ Release ” shall mean any spilling, leaking, seepage, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing, depositing, emanating or migrating in, into, onto or through the environment. “ Reportable Event ” shall mean any reportable event as defined in Section 4043(c) of ERISA or the regulations issued thereunder, other than those events as to which the 30-day notice period referred to in Section 4043(c) of ERISA has been waived, with respect to a Plan (other than a Plan maintained by an ERISA Affiliate that is considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the Code). “ Responsible Officer ” of any person shall mean any executive officer or Financial Officer of such person and any other officer or similar official thereof responsible for the administration of the obligations of such person in respect of this Agreement. “ subsidiary ” shall mean, with respect to any person (herein referred to as the “parent”), any corporation, partnership, association or other business entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or more than 50% of the general partnership interests are, at the time any determination is being made, directly or indirectly, owned, Controlled or held, or (b) that is, at the time any determination is made, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent. “ Subsidiary ” shall mean, unless the context otherwise requires, a subsidiary of the Borrower. “ Swap Agreement ” shall mean any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided , that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Borrower or any of the Subsidiaries shall be a Swap Agreement. “ Taxes ” shall mean any and all present or future taxes, levies, imposts, duties (including stamp duties), deductions, withholdings or similar charges (including ad valorem charges) imposed by any Governmental Authority and any and all interest and penalties related thereto, other than Other Taxes. “ Transactions ” shall mean, collectively the transactions to occur pursuant to or in connection with the Loan Documents, including (a) the execution and delivery of the Loan Documents, (b) the borrowings hereunder and (c) the payment of all fees and expenses to be paid in connection with the foregoing. “ Unfunded Pension Liability ” means, as of the most recent valuation date for the applicable Plan, the excess of (1) the Plan’s actuarial present value (determined on the basis of reasonable assumptions employed by the independent actuary for such Plan for purposes of Section 412 of the Code or Section 302 of ERISA) of its benefit liabilities (as defined in Section 4001(a)(16) of ERISA) over (2) the fair market value of the assets of such Plan. “ Withdrawal Liability ” shall mean liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA. SECTION 1.02 Terms Generally . The definitions set forth or referred to in Section 1.01 shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” All references herein to Articles and Sections shall be deemed references to Articles and Sections of this Agreement unless the context shall otherwise require. Except as otherwise expressly provided herein, any reference in this Agreement to any Loan Document shall mean such document as amended, restated, supplemented or otherwise modified from time to time. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP. SECTION 1.03 Times of Day . Unless otherwise specified, all references herein to times of day shall be references to Local Time. ARTICLE II The Credits SECTION 2.01 Revolving Loans . Subject to the terms and conditions set forth herein, the Lender may agree, in its sole discretion, to make Loans to the Borrower in Dollars from time to time during the Availability Period. Subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Loans. SECTION 2.02 Loans and Borrowings . A Borrowing shall be in an aggregate amount not less than the Borrowing Minimum and that is an integral multiple of the Borrowing Multiple or, if less, in an aggregate amount approved by the Lender. SECTION 2.03 Requests for Borrowings . To request a Borrowing, the Borrower shall notify the Lender of such request not later than 10:00 a.m., Local Time, one Business Day before the date of the proposed Borrowing (or such lesser time acceptable to the Lender). Each such Borrowing Request shall specify the following information in compliance with Section 2.02: (i) the aggregate amount of the requested Borrowing; (ii) the date of such Borrowing, which shall be a Business Day; (iii) the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”; and (iv) the location and number of the Borrower’s account to which funds are to be disbursed. If no Interest Period is specified with respect to any requested Borrowing, then the Borrower shall be deemed to have selected an Interest Period of three month’s duration. At the end of each Interest Period with respect to a Borrowing, if the Borrower does not elect a different Interest Period within three (3) Business Days of the end of such Interest Period, then such Borrowing shall be continued with an Interest Period of three month’s duration. SECTION 2.04 Funding of Borrowings . The Lender shall make each Loan to be made by it hereunder available to the Borrower in immediately available funds not later than 10:00 a.m., Local Time, on the Business Day specified in the applicable Borrowing Request by crediting the amounts to an account of the Borrower as specified in the Borrowing Request. SECTION 2.05 Termination of Agreement . (a) Unless previously terminated, this Agreement shall terminate on the Maturity Date. (b) The Borrower may at any time terminate this Agreement; provided , that the Borrower shall not terminate this Agreement if, after giving effect to any concurrent prepayment of the Loans in accordance with Section 2.07, there shall be any Loans outstanding thereafter. (c) The Borrower shall notify the Lender of any election to terminate this Agreement under clause (b) of this Section at least three Business Days prior to the effective date of such termination, specifying such election and the effective date thereof. SECTION 2.06 Repayment of Loans; Evidence of Debt . (a) The Borrower hereby unconditionally promises to pay to the Lender the then unpaid principal amount of each Loan to the Borrower on the Maturity Date. (b) The Lender shall maintain an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder. (c) The entries made in the accounts maintained pursuant to paragraph (b) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided , that the failure of the Lender to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement. (d) The Lender may request that Loans made by it be evidenced by a promissory note (a “ Note ”). In such event, the Borrower shall prepare, execute and deliver to the Lender a Note payable to the order of the Lender in a form approved by the Lender and reasonably acceptable to the Borrower. Thereafter, unless otherwise agreed to by the Lender, the Loans evidenced by such Note and interest thereon shall at all times be represented by one or more Notes payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns). SECTION 2.07 Prepayment of Loans . The Borrower shall have the right at any time and from time to time to prepay any Loan in whole or in part, without premium or penalty, in an aggregate principal amount that is an integral multiple of the Borrowing Multiple and not less than the Borrowing Minimum or, if less, the amount outstanding, upon prior notice to the Lender not less than one Business Day prior to the date of prepayment. SECTION 2.08 Interest . (a) The Loans shall bear interest at the BBA LIBOR for the Interest Period in effect for such Borrowing plus the Applicable Margin. (b) Notwithstanding the foregoing, if any principal of or interest on any Loan or other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal 2% plus the rate otherwise applicable to Loans as provided in paragraph (a) of this Section; provided , that this paragraph (b) shall not apply to any Event of Default that has been waived by the Lender. (c) Except as otherwise set forth in paragraph (d) of this Section, accrued interest on each Loan shall be payable in cash in arrears (i) on each Interest Payment Date and (ii) upon termination of this Agreement; provided , that (i) interest accrued pursuant to paragraph (b) of this Section shall be payable on demand, and (ii) in the event of any repayment or prepayment of any Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment. (d) The Borrower may elect not to pay accrued interest in cash as set forth in paragraph (c) of this Section and in such case, accrued interest shall be added to the Outstanding Amount of the Loans as of the applicable Interest Payment Date and shall thereafter bear interest at the BBA LIBOR for the Interest Period in effect as of the applicable Interest Payment Date plus the Applicable Margin. (e) All interest hereunder shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day). SECTION 2.09 Increased Costs . (a) If any Change in Law shall: (i) impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, the Lender; or (ii) impose on the Lender or the London interbank market any other condition affecting this Agreement or Loans made by the Lender or participation therein; and the result of any of the foregoing shall be to increase the cost to the Lender of making or maintaining any Loan (or of maintaining its obligation to make any such Loan) or to reduce the amount of any sum received or receivable by the Lender (whether of principal, interest or otherwise), then the Borrower will pay to the Lender such additional amount or amounts as will compensate the Lender for such additional costs incurred or reduction suffered. (b) If the Lender determines that any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on the Lender’s capital or on the capital of the Lender’s holding company, if any, as a consequence of this Agreement or the Loans made by the Lender to a level below that which the Lender or the Lender’s holding company could have achieved but for such Change in Law (taking into consideration the Lender’s policies and the policies of the Lender’s holding company with respect to capital adequacy), then from time to time the Borrower shall pay to the Lender such additional amount or amounts as will compensate the Lender or the Lender’s holding company for any such reduction suffered. (c) A certificate of the Lender setting forth the amount or amounts necessary to compensate the Lender or its holding company, as applicable, as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay the Lender the amount shown as due on any such certificate within 10 days after receipt thereof. (d) Promptly after the Lender has determined that it will make a request for increased compensation pursuant to this Section 2.09, the Lender shall notify the Borrower thereof. Failure or delay on the part of the Lender to demand compensation pursuant to this Section shall not constitute a waiver of the Lender’s right to demand such compensation; provided , that the Borrower shall not be required to compensate the Lender pursuant to this Section for any increased costs or reductions incurred more than 180 days prior to the date that the Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of the Lender’s intention to claim compensation therefor; provided , further , that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof. (e) The foregoing provisions of this Section 2.09 shall not apply in the case of any Change in Law in respect of Taxes, which shall instead be governed by Section 2.10. SECTION 2.10 Taxes . (a) Any and all payments by or on account of any obligation of the Borrower hereunder shall be made free and clear of and without withholding or deduction for any Indemnified Taxes or Other Taxes; provided, that if the Borrower shall be required to withhold or deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required withholding or deductions (including withholding or deductions applicable to additional sums payable under this Section) the Lender receives an amount equal to the sum it would have received had no such withholding or deductions been made, (ii) the Borrower shall make such withholding or deductions and (iii) the Borrower shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with applicable law. (b) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law. (c) The Borrower shall indemnify the Lender within 10 days after written demand therefor, for the full amount of any Indemnified Taxes payable by the Lender on or with respect to any payment by or on account of any obligation of the Borrower hereunder (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section), and any Other Taxes (including Other Taxes imposed or asserted on or attributable to amounts payable under this Section) and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by the Lender shall be conclusive absent manifest error. (d) If the Lender is entitled to an exemption from or reduction of withholding Tax or backup withholding Tax under the law of the jurisdiction in which the Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Borrower, to the extent the Lender is legally entitled to do so, at the time or times prescribed by applicable law, such properly completed and executed documentation prescribed by applicable law, or as may reasonably be requested by the Borrower to permit such payments to be made without such withholding tax or at a reduced rate; provided that, with respect to any withholding tax imposed by any jurisdiction other than the United States, the Lender shall not be required to provide any documentation if the Lender reasonably determines that doing so would be materially disadvantageous to the Lender. (e) If the Lender has received a refund of any Indemnified Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section 2.10, it shall pay over such refund to the Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section 2.10 with respect to the Indemnified Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Lender (including any Taxes imposed with respect to such refund) as is determined by the Lender in good faith, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided , that the Borrower, upon the request of the Lender, agrees to repay as soon as reasonably practicable the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Lender in the event the Lender is required to repay such refund to such Governmental Authority. This Section 2.10 shall not be construed to require the Lender to make available its Tax returns (or any other information relating to its Taxes which it deems in good faith to be confidential) to the Borrower or any other person. Notwithstanding anything to the contrary, in no event will the Lender be required to pay any amount to the Borrower, the payment of which would place the Lender in a less favorable net after tax position than the Lender would have been in if the additional amounts giving rise to such refund of any Indemnified Taxes or Other Taxes had never been paid. SECTION 2.11 Payments Generally . (a) The Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, fees or of amounts payable under Section 2.09 or 2.11, or otherwise) without condition or deduction for any defense, recoupment, set-off or counterclaim. Except as otherwise expressly provided herein, all payments by the Borrower hereunder shall be made to the Lender, at the Lender’s Office in Dollars and in immediately available funds not later than 2:00 p.m. on the date specified herein. Any amounts received after such time on any date may, in the discretion of the Lender, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. (b) If at any time insufficient funds are received by and available to the Lender from the Borrower to pay fully all amounts of principal, interest and fees then due from the Borrower hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due from the Borrower hereunder and (ii) second, towards payment of principal of Loans then due from the Borrower hereunder. SECTION 2.12 Mitigation Obligations . If the Lender requests compensation under Section 2.09, or if the Borrower is required to pay any additional amount to the Lender or any Governmental Authority for the account of the Lender pursuant to Section 2.10, then the Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or Affiliates, if, in the reasonable judgment of the Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.09 or 2.10, as applicable, in the future and (ii) would not subject the Lender to any material unreimbursed cost or expense and would not otherwise be disadvantageous to the Lender in any material respect. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by the Lender in connection with any such designation or assignment. ARTICLE III Representations and Warranties On the date of each Credit Event, the Borrower represents and warrants to the Lender that: SECTION 3.01 Organization; Powers . The Borrower (a) is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (b) has all requisite power and authority to own its property and assets and to carry on its business as now conducted, (c) is qualified to do business in each jurisdiction where such qualification is required, except where the failure so to qualify would not reasonably be expected to have a Material Adverse Effect, and (d) has the power and authority to execute, deliver and perform its obligations under each of the Loan Documents and each other agreement or instrument contemplated thereby to which it is or will be a party and to borrow and otherwise obtain credit hereunder. SECTION 3.02 Authorization . The execution, delivery and performance by the Borrower of each of the Loan Documents to which it is a party, and the borrowings hereunder and the transactions forming a part of the Transactions (a) have been duly authorized by all corporate or stockholder action required to be obtained by the Borrower and (b) will not (i) violate (A) any provision of law, statute, rule or regulation, or of the certificate or articles of incorporation or by-laws of the Borrower, (B) any applicable order of any court or any rule, regulation or order of any Governmental Authority or (C) any provision of any indenture, certificate of designation for preferred stock, agreement or other instrument to which the Borrower is a party or by which any of them or any of their property is or may be bound or (ii) be in conflict with, result in a breach of or constitute (alone or with notice or lapse of time or both) a default under, give rise to a right of or result in any cancellation or acceleration of any right or obligation (including any payment) or to a loss of a material benefit under any such indenture, certificate of designation for preferred stock, agreement or other instrument, where any such conflict, violation, breach or default referred to in clause (i) or (ii) of this Section 3.02(b), would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. SECTION 3.03 Enforceability . This Agreement has been duly executed and delivered by the Borrower and constitutes, and each other Loan Document when executed and delivered by the Borrower will constitute, a legal, valid and binding obligation of the Borrower enforceable against the Borrower in accordance with its terms, subject to (i) the effects of bankruptcy, insolvency, moratorium, reorganization, fraudulent conveyance or other similar laws affecting creditors’ rights generally, (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and (iii) implied covenants of good faith and fair dealing. SECTION 3.04 Governmental Approvals . No action, consent or approval of, registration or filing with or any other action by any Governmental Authority is or will be required in connection with the Transactions or the exercise by the Lender of its rights under the Loan Documents, except for (a) such actions, consents and approvals under Gaming Laws or from Gaming Authorities the failure of which to be obtained or made would not reasonably be expected to have a Material Adverse Effect, (b) such as have been made or obtained and are in full force and effect and (c) such actions, consents and approvals the failure of which to be obtained or made would not reasonably be expected to have a Material Adverse Effect. SECTION 3.05 No Material Adverse Effect . After the Closing Date, there has been no event or circumstance that has had or would reasonably be expected to have a Material Adverse Effect. SECTION 3.06 Litigation; Compliance with Laws . (a) There are no actions, suits or proceedings at law or in equity or by or on behalf of any Governmental Authority or in arbitration now pending, or, to the knowledge of the Borrower, threatened in writing against or affecting the Borrower or any business, property or rights of the Borrower which would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. (b) None of the Borrower and its properties or assets is in violation of (nor will the continued operation of their material properties and assets as currently conducted violate) any law, rule or regulation (including any zoning, building, ordinance, code or approval or any building permit, but excluding any Environmental Laws, which are subject to Section 3.12), or is in default with respect to any judgment, writ, injunction or decree of any Governmental Authority, where such violation or default would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. (c) The Borrower is in compliance in all material respects with all Gaming Laws that are applicable to it and its businesses. SECTION 3.07 Federal Reserve Regulations . (f) The Borrower is not engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying Margin Stock. (g) No part of the proceeds of any Loan will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately, (i) to purchase or carry Margin Stock or to extend credit to others for the purpose of purchasing or carrying Margin Stock or to refund indebtedness originally incurred for such purpose, or (ii) for any purpose that entails a violation of, or that is inconsistent with, the provisions of the Regulations of the Board, including Regulation U or Regulation X. SECTION 3.08 Investment Company Act . The Borrower is not an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940, as amended. SECTION 3.09 Use of Proceeds . The Borrower will use the proceeds of the Loans solely for general corporate purposes. SECTION 3.10 Tax Returns . (c) Except as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, the Borrower has filed or caused to be filed all federal, state, local and non-U.S. Tax returns required to have been filed by it and each such Tax return is true and correct; (d) The Borrower has timely paid or caused to be timely paid all Taxes shown to be due and payable by it on the returns referred to in clause (a) and all other Taxes or assessments (or made adequate provision (in accordance with GAAP) for the payment of all Taxes not yet due) with respect to all periods or portions thereof ending on or before the Closing Date including in its capacity as a withholding agent (except Taxes or assessments that are being contested in good faith by appropriate proceedings and for which the Borrower has set aside on its books adequate reserves in accordance with GAAP), which Taxes, if not paid or adequately provided for, would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and (e) Other than as would not be, individually or in the aggregate, reasonably expected to have a Material Adverse Effect: as of the Closing Date, with respect to the Borrower, there are no claims being asserted in writing with respect to any Taxes. SECTION 3.11 Employee Benefit Plans . (I) Except as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect: (i) each Plan is in compliance with the applicable provisions of ERISA and the Code; (ii) no Reportable Event has occurred during the past five years as to which the Borrower or any ERISA Affiliate was required to file a report with the PBGC, other than reports that have been filed; (iii) as of the most recent valuation date preceding the date of this Agreement, no Plan has any material Unfunded Pension Liability; (iv) no ERISA Event has occurred or is reasonably expected to occur; (v) none of the Borrower and the ERISA Affiliates (A) has received any written notification that any Multiemployer Plan is in reorganization or has been terminated within the meaning of Title IV of ERISA, or has knowledge that any Multiemployer Plan is reasonably expected to be in reorganization or to be terminated or (B) has incurred or is reasonably expected to incur any withdrawal liability to any Multiemployer Plan; and (vi) the Borrower has not engaged in a “prohibited transaction” (as defined in Section 406 of ERISA and Code Section 4975) in connection with any employee pension benefit plan (as defined in Section 3(2) of ERISA) that would subject the Borrower to tax. (a) The Borrower is in compliance (i) with all applicable provisions of law and all applicable regulations and published interpretations thereunder with respect to any employee pension benefit plan or other employee benefit plan governed by the laws of a jurisdiction other than the United States and (ii) with the terms of any such plan, except, in each case, for such noncompliance that would not reasonably be expected to have a Material Adverse Effect. (b) Except as would not reasonably be expected to result in a Material Adverse Effect, there are no pending or, to the knowledge of the Borrower, threatened claims (other than claims for benefits in the normal course), sanctions, actions or lawsuits, asserted or instituted against any Plan or any person as fiduciary or sponsor of any Plan that would reasonably be expected to result in liability to the Borrower. SECTION 3.12 Environmental Matters . Except as to matters that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect: (i) no written notice has been received by the Borrower, and there are no judicial, administrative or other actions, suits or proceedings pending or, to the Borrower’s knowledge, threatened which allege a violation of any Environmental Laws, in each case relating to the Borrower, (ii) the Borrower has all environmental permits, licenses and other approvals necessary for its operations to comply with all applicable Environmental Laws and is in compliance with the terms of such permits, licenses and other approvals and with all other applicable Environmental Laws, (iii) to the Borrower’s knowledge, no Hazardous Material is located at, on or under any property currently owned, operated or leased or formerly owned, operated or leased, by the Borrower that would reasonably be expected to give rise to any cost, liability or obligation of the Borrower under any Environmental Laws, and no Hazardous Material has been generated, owned, treated, stored, handled or controlled by the Borrower and transported to or Released at any location in a manner that would reasonably be expected to give rise to any cost, liability or obligation of the Borrower under any Environmental Laws and (iv) there are no agreements in which the Borrower has expressly assumed or undertaken responsibility for any known or reasonably likely liability or obligation of any other person arising under or relating to Environmental Laws, which in any such case has not been made available to the Lender prior to the date hereof. SECTION 3.13 Solvency . (a) On the Closing Date, immediately after giving effect to the Transactions that occur on the Closing Date, (i) the fair value of the assets of the Borrower and its Subsidiaries on a consolidated basis, at a fair valuation, will exceed the debts and liabilities, direct, subordinated, contingent or otherwise, of the Borrower and its Subsidiaries on a consolidated basis; (ii) the present fair saleable value of the property of the Borrower and its Subsidiaries on a consolidated basis will be greater than the amount that will be required to pay the probable liability of the Borrower and its Subsidiaries on a consolidated basis on their debts and other liabilities, direct, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii) the Borrower and its Subsidiaries on a consolidated basis will be able to pay their debts and liabilities, direct, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (iv) the Borrower and its Subsidiaries on a consolidated basis will not have unreasonably small capital with which to conduct the businesses in which they are engaged as such businesses are now conducted and are proposed to be conducted following the Closing Date. (b) On the Closing Date, the Borrower does not intend to, and the Borrower does not believe that it or any of its Subsidiaries will, incur debts beyond its ability to pay such debts as they mature, taking into account the timing and amounts of cash to be received by it or any such subsidiary and the timing and amounts of cash to be payable on or in respect of its Indebtedness or the Indebtedness of any such subsidiary. SECTION 3.14 Labor Matters . Except as, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect: (a) there are no strikes or other labor disputes pending or threatened against the Borrower; (b) the hours worked and payments made to employees of the Borrower have not been in violation of the Fair Labor Standards Act or any other applicable law dealing with such matters; and (c) all payments due from the Borrower or for which any claim may be made against the Borrower, on account of wages and employee health and welfare insurance and other benefits have been paid or accrued as a liability on the books of the Borrower to the extent required by GAAP. Except as, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect, the consummation of the Transactions will not give rise to a right of termination or right of renegotiation on the part of any union under any material collective bargaining agreement to which the Borrower (or any predecessor) is a party or by which the Borrower (or any predecessor) is bound. SECTION 3.15 No Default . No Default or Event of Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement or any other Loan Document. ARTICLE IV Conditions of Lending The obligations of the Lender to make Loans hereunder (each, a “ Credit Event ”) are subject to the satisfaction of the following conditions: SECTION 4.01 All Credit Events . On the date of each Borrowing: (b) The Lender shall have received a Borrowing Request as required by Section 2.03. (c) The representations and warranties set forth in the Loan Documents shall be true and correct in all material respects as of such date, as applicable, with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and correct in all material respects as of such earlier date). (d) At the time of and immediately after such Borrowing, no Event of Default or Default shall have occurred and be continuing. Each such Borrowing shall be deemed to constitute a representation and warranty by the Borrower on the date of such Borrowing as to the matters specified in paragraphs (b) and (c) of this Section 4.01. ARTICLE V Events of Default SECTION 5.01 Events of Default . In case of the happening of any of the following events (each, an “ Event of Default ”): (a) any representation or warranty made or deemed made by the Borrower herein or in any other Loan Document or any certificate or document delivered pursuant hereto or thereto shall prove to have been false or misleading in any material respect when so made or deemed made; (b) default shall be made in the payment of any principal of any Loan when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or by acceleration thereof or otherwise; (c) default shall be made in the payment of any interest on any Loan or in the payment of any other amount (other than an amount referred to in (b) above) due under any Loan Document, when and as the same shall become due and payable, and such default shall continue unremedied for a period of three Business Days; (d) default shall be made in the due observance or performance by the Borrower of any condition or agreement contained in any Loan Document (other than those specified in paragraphs (b) and (c) above) and such default shall continue unremedied for a period of 30 days after notice thereof from the Lender to the Borrower; (e) (i) any event or condition occurs that (A) results in any Material Indebtedness becoming due prior to its scheduled maturity or (B) enables or permits (with all applicable grace periods having expired) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; or (ii) the Borrower shall fail to pay the principal of any Material Indebtedness at the stated final maturity thereof; provided that this clause (e) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness if such sale or transfer is permitted hereunder and under the documents providing for such Indebtedness; (f) an involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking (i) relief in respect of the Borrower, or of a substantial part of the property or assets of the Borrower, under Title 11 of the United States Code, as now constituted or hereafter amended, or any other federal, state or foreign bankruptcy, insolvency, receivership or similar law, (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or for a substantial part of the property or assets the Borrower or (iii) the winding-up or liquidation of the Borrower; and such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered; (g) the Borrower shall (i) voluntarily commence any proceeding or file any petition seeking relief under Title 11 of the United States Code, as now constituted or hereafter amended, or any other federal, state or foreign bankruptcy, insolvency, receivership or similar law, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or the filing of any petition described in paragraph (f) above, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or for a substantial part of the property or assets of the Borrower, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) become unable or admit in writing its inability or fail generally to pay its debts as they become due; (h) the failure by the Borrower to pay one or more final judgments aggregating in excess of $150 million (to the extent not covered by insurance), which judgments are not discharged or effectively waived or stayed for a period of 45 consecutive days, or any action shall be legally taken by a judgment creditor to levy upon assets or properties the Borrower to enforce any such judgment; (i) (i) a trustee shall be appointed by a United States district court to administer any Plan, (ii) an ERISA Event or ERISA Events shall have occurred with respect to any Plan or Multiemployer Plan, (iii) the PBGC shall institute proceedings (including giving notice of intent thereof) to terminate any Plan or Plans, (iv) the Borrower or any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or is being terminated, within the meaning of Title IV of ERISA or (v) the Borrower shall engage in any “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan that would subject the Borrower to tax; and in each case in clauses (i) through (v) above, such event or condition, together with all other such events or conditions, if any, would reasonably be expected to have a Material Adverse Effect; or (j) any material provision of any Loan Document shall for any reason be asserted in writing by the Borrower not to be a legal, valid and binding obligation of any party thereto, then, and in every such event (other than an event with respect to the Borrower described in paragraph (f) or (g) above), and at any time thereafter during the continuance of such event, the Lender, may, by notice to the Borrower, take any or all of the following actions, at the same or different times: declare the Loans then outstanding to be forthwith due and payable in whole or in part, whereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all other liabilities of the Borrower accrued hereunder and under any other Loan Document, shall become forthwith due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived by the Borrower, anything contained herein or in any other Loan Document to the contrary notwithstanding; and in any event with respect to the Borrower described in paragraph (f) or (g) above, the principal of the Loans then outstanding, together with accrued interest thereon and all other liabilities of the Borrower accrued hereunder and under any other Loan Document, shall automatically become due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived by the Borrower, anything contained herein or in any other Loan Document to the contrary notwithstanding. ARTICLE VI Miscellaneous SECTION 6.01 Notices; Communications . (d) Except in the case of notices and other communications permitted to be given by telephone (and except as provided in Section 6.01(b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as follows, and all notices and other communications permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows: (i) if to the Borrower, Caesars Entertainment Operating Company, Inc. One Caesars Palace Drive Las Vegas, NV 89109 Attn: General Counsel Tel: 702-407-6393 Fax: 702-407-6418 (ii) if to the Lender, Caesars Entertainment Corporation One Caesars Palace Drive Las Vegas, NV 89109 Attn: General Counsel Tel: 702-407-6393 Fax: 702-407-6418 (e) Notices and other communications to the Lender hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites). The Lender or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications. (f) Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received. Notices sent by telecopier shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient). Notices or communications (i) sent to an e-mail address shall be deemed received when delivered and (ii) posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefore. (g) Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. SECTION 6.02 Survival of Agreement . All agreements, representations and warranties made by the Borrower herein, in the other Loan Documents and in the certificates or other instruments prepared or delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the Lender and shall survive the making by the Lender of the Loans and the execution and delivery of the Loan Documents, regardless of any investigation made by such persons or on their behalf, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any other amount payable under this Agreement or any other Loan Document is outstanding and unpaid and so long as this Agreement has not been terminated. Without prejudice to the survival of any other agreements contained herein, indemnification and reimbursement obligations contained herein (including pursuant to Sections 2.10, 2.11 and 6.04) shall survive the payment in full of the principal and interest hereunder and the termination of this Agreement. SECTION 6.03 Binding Effect . This Agreement shall become effective when it shall have been executed by the Borrower and the Lender and when the Lender shall have received copies hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the Borrower and the Lender and their respective permitted successors and assigns. SECTION 6.04 Successors and Assigns . (h) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that (i) the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void), and (ii) Lender may not assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section 6.04. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any person (other than the parties hereto, their respective successors and assigns permitted hereby) any legal or equitable right, remedy or claim under or by reason of this Agreement or the other Loan Documents. (i) The Lender may assign to one or more assignees (each, an “ Assignee ”) all or a portion of its rights and obligations under this Agreement (including all or a portion of the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld) of the Borrower; provided , that no consent of the Borrower shall be required for an assignment to an affiliate of a Lender or, if an Event of Default has occurred and is continuing. Any assignment by Lender will be pursuant to customary assignment documents reasonably acceptable to the Borrower and Lender. SECTION 6.05 Expenses . (f) The Borrower agrees to pay (i) all reasonable documented out-of-pocket expenses (including Other Taxes) incurred by the Lender in connection with the preparation of this Agreement and the other Loan Documents, or in connection with the administration of this Agreement and any amendments, modifications or waivers of the provisions hereof or thereof, and (ii) all out-of-pocket expenses (including Other Taxes) incurred by the Lender in connection with the enforcement or protection of their rights in connection with this Agreement and the other Loan Documents, in connection with the Loans made hereunder. (g) Except as expressly provided in Section 6.05(a) with respect to Other Taxes, which shall not be duplicative of any amounts paid pursuant to Section 2.10, this Section 6.05 shall not apply to Taxes, except taxes that represent damages or losses resulting from a non-Tax claim. (h) The agreements in this Section 6.05 shall survive the repayment, satisfaction or discharge of all the other Obligations and the termination of this Agreement. SECTION 6.06 Right of Set-off . If an Event of Default shall have occurred and be continuing, the Lender is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by the Lender to or for the credit or the account of the Borrower against any of and all the obligations of the Borrower now or hereafter existing under this Agreement or any other Loan Document held by the Lender, irrespective of whether or not the Lender shall have made any demand under this Agreement or such other Loan Document and although the obligations may be unmatured. The rights of the Lender under this Section 6.06 are in addition to other rights and remedies (including other rights of set-off) that the Lender may have. SECTION 6.07 Applicable Law . THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN AS EXPRESSLY SET FORTH IN OTHER LOAN DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. SECTION 6.08 Waivers; Amendment . (c) No failure or delay of the Lender in exercising any right or power hereunder or under any Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Lender hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or any other Loan Document or consent to any departure by the Borrower therefrom shall in any event be effective unless the same shall be permitted by clause (b) below, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice or demand on the Borrower in any case shall entitle such person to any other or further notice or demand in similar or other circumstances. (d) Neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrower and the Lender. SECTION 6.09 Interest Rate Limitation . Notwithstanding anything herein to the contrary, if at any time the applicable interest rate, together with all fees and charges that are treated as interest under applicable law (collectively, the “ Charges ”), as provided for herein or in any other document executed in connection herewith, or otherwise contracted for, charged, received, taken or reserved by the Lender, shall exceed the maximum lawful rate (the “ Maximum Rate ”) that may be contracted for, charged, taken, received or reserved by the Lender in accordance with applicable law, the rate of interest payable hereunder, together with all Charges payable to the Lender, shall be limited to the Maximum Rate; provided, that such excess amount shall be paid to the Lender on subsequent payment dates to the extent not exceeding the legal limitation. SECTION 6.10 Entire Agreement . This Agreement and the other Loan Documents constitute the entire contract between the parties relative to the subject matter hereof. Any previous agreement among or representations from the parties or their Affiliates with respect to the subject matter hereof is superseded by this Agreement and the other Loan Documents. Nothing in this Agreement or in the other Loan Documents, expressed or implied, is intended to confer upon any party other than the parties hereto and thereto any rights, remedies, obligations or liabilities under or by reason of this Agreement or the other Loan Documents. SECTION 6.11 WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 6.11. SECTION 6.12 Severability . In the event any one or more of the provisions contained in this Agreement or in any other Loan Document should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby. The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions. SECTION 6.13 Counterparts . This Agreement may be executed in two or more counterparts, each of which shall constitute an original but all of which, when taken together, shall constitute but one contract, and shall become effective as provided in Section 6.03. Delivery of an executed counterpart to this Agreement by facsimile transmission (or other electronic transmission pursuant to procedures approved by the Lender) shall be as effective as delivery of a manually signed original. SECTION 6.14 Headings . Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement. SECTION 6.15 Jurisdiction; Consent to Service of Process . (a) Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or federal court of the United States of America sitting in New York City, and any appellate court from any thereof (collectively, “ New York Courts ”), in any action or proceeding arising out of or relating to this Agreement or the other Loan Documents, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that any party may otherwise have to bring any action or proceeding relating to this Agreement or any of the other Loan Documents in the courts of any jurisdiction, except that Borrower agrees that (a) it will not bring any such action or proceeding in any court other than New York Courts (it being acknowledged and agreed by the parties hereto that any other forum would be inconvenient and inappropriate in view of the fact that the Lender has contacts with the State of New York), and (b) in any such action or proceeding brought against the Borrower in any other court, it will not assert any cross-claim, counterclaim or setoff, or seek any other affirmative relief, except to the extent that the failure to assert the same will preclude the Borrower from asserting or seeking the same in the New York Courts. (b) Each of the parties hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or the other Loan Documents in any New York State or federal court. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. (c) Each party hereto irrevocably consents to service of process in the manner provided for notices in Section 6.01. Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner permitted by applicable law. SECTION 6.16 Application of Gaming Laws . (a) This Agreement and the other Loan Documents are subject to Gaming Laws. Without limiting the foregoing, the Lender acknowledges that (i) it is subject to the jurisdiction of the Gaming Authorities and Liquor Authorities, in their discretion, for licensing, qualification or findings of suitability or to file or provide other information, and (ii) all rights, remedies and powers in or under this Agreement and the other Loan Documents are subject to the jurisdiction of the Gaming Authorities and Liquor Authorities, and may be exercised only to the extent that the exercise thereof does not violate any applicable provisions of the Gaming Laws and Liquor Laws and only to the extent that required approvals (including prior approvals) are obtained from the relevant Gaming Authorities and Liquor Authorities. (b) The Lender agrees to cooperate with all Gaming Authorities and Liquor Authorities in connection with the provision in a timely manner of such documents or other information as may be requested by such Gaming Authorities and Liquor Authorities relating to the Loan or Loan Documents. SECTION 6.17 Original Credit Agreement; Effectiveness of Amendment and Restatement. This Agreement amends and restates that certain Credit Agreement dated as of August 1, 2008 between the Borrower and the Lender (the “ Original Credit Agreement ”). All Loans outstanding under the Original Credit Agreement on and as of the Closing Date shall remain outstanding or funded, as applicable, hereunder on the terms set forth herein. The Borrower and Lender confirm that the amendment and restatement of the Original Credit Agreement pursuant to this Agreement shall not constitute a novation of the Original Credit Agreement. [Signature Pages Follow] IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first written above. CAESARS ENTERTAINMENT CORPORATION, as Lender CAESARS ENTERTAINMENT OPERATING COMPANY, INC., as Borrower By: /s/Eric A. Hession_______________________ Name: Eric A. Hession Title: Senior Vice President and Treasurer By: /s/ Eric A. Hession______________________ Name: Eric A. Hession Title: Senior Vice President and Treasurer Exhibit 10.84 FORM OF CAESARS ENTERTAINMENT CORPORATION 2012 PERFORMANCE INCENTIVE PLAN RESTRICTED SHARE AWARD AGREEMENT THIS RESTRICTED SHARE AWARD AGREEMENT (the “ Agreement ”) is made by and between Caesars Entertainment Corporation, a Delaware corporation (the “ Corporation ”), and [______] (“ Participant ”) on the date set forth on the final page of this Agreement. Any capitalized terms not otherwise defined in this Agreement shall have the definitions set forth in the Plan. WHEREAS, the Corporation has adopted the Caesars Entertainment Corporation 2012 Performance Incentive Plan (the “ Plan ”), pursuant to which Restricted Shares may be granted; and WHEREAS, the Administrator has determined that it is in the best interests of the Corporation and its stockholders to grant the Restricted Shares provided for herein to Participant subject to the terms set forth herein. NOW, THEREFORE, the parties hereto, for themselves, their successors and assigns, hereby agree as follows: (a) Grant . The Corporation hereby grants to Participant, on the Date of Grant (as set forth on the final page of this Agreement) the number of restricted shares of Common Stock of the Corporation set forth on the final page of this Agreement (the “ Restricted Shares ”), on the terms and conditions set forth in this Agreement and as otherwise provided in the Plan. Notwithstanding the foregoing, as a condition precedent to the effectiveness of the grant, Participant agrees to be bound by the terms of the Management Investor Rights Agreement between the Corporation and its stockholders, as the same may be in effect from time to time (the “ MIRA ”) and has executed the MIRA on the date hereof. (b) Incorporation by Reference, Etc. The provisions of the Plan are hereby incorporated herein by reference. Except as otherwise expressly set forth herein, this Agreement shall be construed in accordance with the provisions of the Plan and any interpretations, amendments, rules and regulations promulgated by the Administrator from time to time pursuant to the Plan. The Administrator shall have final authority to interpret and construe the Plan and this Agreement and to make any and all determinations under them, and its decisions shall be binding and conclusive upon Participant and his or her legal representative in respect of any questions arising under the Plan or this Agreement. (c) Acceptance of Agreement . In order to accept this Agreement, Participant must indicate acceptance of the Restricted Shares and acknowledgment that the terms of the Plan and this Agreement have been read and understood by signing and returning a copy of this Agreement as instructed by the Corporation. By accepting this Agreement, Participant consents to the electronic delivery of prospectuses, annual reports and other information required to be delivered by Securities and Exchange Commission rules (which consent may be revoked in writing by Participant at any time upon three business days’ notice to the Corporation, in which case subsequent prospectuses, annual reports and other information will be delivered in hard copy to Participant). 1. Grant of Restricted Shares. 2. Vesting. Except as may otherwise be provided herein, subject to Participant’s continued employment with the Corporation or one of its Subsidiaries, the Restricted Shares shall become vested on the dates set forth on the final page of this Agreement, subject to the conditions set forth herein. Upon vesting, the Restricted Shares shall no longer be subject to the transfer restrictions pursuant to Section 7(a) or cancellation pursuant to Section 3 hereof. 3. Termination of Employment. Except as otherwise provided in an employment agreement (or similar agreement) between Participant and the Corporation or any of its Subsidiaries in effect on the Date of Grant, if Participant’s employment or service with the Corporation or any Subsidiary, as applicable, terminates for any reason, then the unvested portion of the Restricted Shares shall be cancelled immediately and Participant shall immediately forfeit any rights to such Restricted Shares. 4. Rights as a Stockholder. At all times, Participant shall have, with respect to the Restricted Shares, all the rights of a stockholder of the Corporation pursuant to the terms of the MIRA. 5. Book-Entry Registration. Any Restricted Shares shall be evidenced by book-entry registration. The book-entry registration shall bear a legend referring to the restrictions applicable to such Restricted Shares in substantially the following form: THE SECURITIES ARE SUBJECT TO AN AMENDED AND RESTATED MANAGEMENT INVESTOR RIGHTS AGREEMENT DATED AS OF NOVEMBER 22, 2010 AMONG THE ISSUER OF SUCH SECURITIES (THE “CORPORATION”), AND THE OTHER PARTIES NAMED THEREIN, THE CORPORATION’S 2012 PERFORMANCE INCENTIVE PLAN AND AN AWARD AGREEMENT. THE TERMS OF SUCH MANAGEMENT INVESTOR RIGHTS AGREEMENT, 2012 PERFORMANCE INCENTIVE PLAN AND AWARD AGREEMENT INCLUDE, AMONG OTHER THINGS, RESTRICTIONS ON TRANSFER. A COPY OF SUCH AGREEMENTS WILL BE FURNISHED WITHOUT CHARGE BY THE CORPORATION TO THE HOLDER HEREOF UPON WRITTEN REQUEST. 6. Compliance with Legal Requirements. (a) Generally . The granting of the Restricted Shares, and any other obligations of the Corporation under this Agreement, shall be subject to all applicable federal, provincial, state, local and foreign laws, rules and regulations and to such approvals by any regulatory or governmental agency as may be required. The Administrator shall have the right to impose such restrictions on the Restricted Shares as it deems necessary or advisable under applicable federal securities laws, the rules and regulations of any stock exchange or market upon which the shares of Common Stock of the Corporation are then listed or traded, and/or any blue sky or state securities laws applicable to such Restricted Shares. Participant agrees to take all steps the Administrator or the Corporation determines are necessary to comply with all applicable provisions of federal and state securities law in exercising his or her rights under this Agreement. (b) Tax Withholding . Vesting of the Restricted Shares shall be subject to Participant satisfying any applicable federal, state, local and foreign tax withholding obligations. The Corporation shall have the power and the right to require Participant to remit to the Corporation or deduct or withhold from all amounts payable to Participant in connection with the Restricted Shares or otherwise, an amount sufficient to satisfy any applicable taxes required by law. Further, the Corporation may permit or require Participant to satisfy, in whole or in part, the tax obligations by withholding shares of Common Stock of the Corporation that would otherwise be received upon vesting of the Restricted Shares. (c) 83(b) Election . As a condition subsequent to the issuance of the Restricted Shares, a Participant is required to execute and deliver to the Corporation and file with the Internal Revenue Service an Election to include Property in Gross Income pursuant to Section 83(b) of the Internal Revenue Code within 30 days following the Date of Grant specified below. (a) Transferability . The Restricted Shares may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Participant other than by will or by the laws of descent and distribution, pursuant to a qualified domestic relations order if approved or ratified by the Administrator or as otherwise permitted under Section 5.7.2 or 5.7.3 of the Plan. (b) Waiver . Any right of the Corporation contained in this Agreement may be waived in writing by the Administrator. No waiver of any right hereunder by any party shall operate as a waiver of any other right, or as a waiver of the same right with respect to any subsequent occasion for its exercise, or as a waiver of any right to damages. No waiver by any party of any breach of this Agreement shall be held to constitute a waiver of any other breach or a waiver of the continuation of the same breach. (c) Section 409A . The Restricted Shares are not intended to be subject to Section 409A of the Code. Notwithstanding the foregoing or any provision of the Plan or this Agreement, if any provision of the Plan or this Agreement contravenes Section 409A of the Code or could cause Participant to incur any tax, interest or penalties under Section 409A of the Code, the Administrator may, in its sole discretion and without Participant’s consent, modify such provision to (i) comply with, or avoid being subject to, Section 409A of the Code, or to avoid the incurrence of taxes, interest and penalties under Section 409A of the Code, and/or (ii) maintain, to the maximum extent practicable, the original intent and economic benefit to Participant of the applicable provision without materially increasing the cost to the Corporation or contravening the provisions of Section 409A of the Code. This Section 7(c) does not create an obligation on the part of the Corporation to modify the Plan or this Agreement and does not guarantee that the Restricted Shares will not be subject to interest and penalties under Section 409A. (d) Notices . Any written notices provided for in this Agreement or the Plan shall be in writing and shall be deemed sufficiently given if either hand delivered or if sent by fax, pdf/email or overnight courier, or by postage paid first class mail. Notices sent by mail shall be deemed received three business days after mailing but in no event later than the date of actual receipt. Notices shall be directed, if to Participant, at Participant’s address indicated by the Corporation’s records, or if to the Corporation, to the Corporation’s principal business office. (e) Severability . The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, and each other provision of this Agreement shall be severable and enforceable to the extent permitted by law. (f) No Rights to Employment . Nothing contained in this Agreement shall be construed as giving Participant any right to be retained, in any position, as an employee or consultant of the Corporation or its Subsidiaries or shall interfere with or restrict in any way the right of the Corporation or its Subsidiaries, which are hereby expressly reserved, to remove, terminate or discharge Participant at any time for any reason whatsoever. 7. Miscellaneous. (g) No Rights to Award . The grant to Participant of the Restricted Shares pursuant to this Agreement shall not give Participant any claim or rights to be granted any future award or additional awards under the Plan, subject to any express contractual rights (set forth in a document other than the Plan and this Agreement) to the contrary. (h) Fractional Shares . No fractional shares shall be delivered under this Agreement. In lieu of issuing a fraction of a share in settlement of vested Restricted Shares, the Corporation shall be entitled to pay to Participant an amount in cash equal to the fair market value (as defined in the Plan) of such fractional share. (i) Beneficiary . Participant may file with the Administrator a written designation of a beneficiary on such form as may be prescribed by the Administrator and may, from time to time, amend or revoke such designation. If no validly designated beneficiary survives Participant, Participant’s estate shall be deemed to be Participant’s beneficiary. (j) Bound by Plan . By signing this Agreement, Participant acknowledges that Participant has received a copy of the Plan and has had an opportunity to review the Plan and agrees to be bound by all the terms and provisions of the Plan. (k) Successors . The terms of this Agreement shall be binding upon and inure to the benefit of the Corporation and its successors and assigns, and of Participant and the beneficiaries, executors, administrators, heirs and successors of Participant. (l) Entire Agreement . This Agreement and the Plan contain the entire agreement and understanding of the parties hereto with respect to the subject matter contained herein and supersede all prior communications, representations and negotiations in respect thereto. No change, modification or waiver of any provision of this Agreement shall be valid unless the same be in writing and signed by the parties hereto, except for any changes permitted without consent under Section 8.6.4 of the Plan. (m) Governing Law . This Agreement shall be governed, construed and interpreted in accordance with the laws of the State of Delaware without regard to principles of conflicts of law thereof, or principles of conflicts of laws of any other jurisdiction which could cause the application of the laws of any jurisdiction other than the State of Delaware. (n) Captions . The captions and headings of the Sections hereof are provided for convenience only and are not to serve as a basis for interpretation or construction, and shall not constitute a part, of this Agreement. IN WITNESS WHEREOF, the Corporation and Participant have executed this Agreement as set forth below. CAESARS ENTERTAINMENT CORPORATION By:__________ Name: Title: Date: __________________________________ Agreed to and Accepted by: _________________________ The Participant Date:____________________ Number of Restricted Shares: [____] Date of Grant: [____] Vesting Schedule: [____] Exhibit 10.85 EMPLOYMENT AGREEMENT THIS AGREEMENT, made as of November 14, 2012 (the “ Effective Date ”) between Caesars Entertainment Operating Company, Inc., with offices at One Caesars Palace Drive, Las Vegas, Nevada (the “ Company ”), and Donald Colvin (“ Employee ”). The Company and Employee agree as follows: 1. Introductory Statement . The Company desires to secure the services of Employee effective on the Effective Date. The Company hereby agrees to employ Employee, and Employee hereby agrees to be employed by the Company, subject to the terms and conditions of this Agreement, for a period beginning on the Effective Date and ending on the fourth anniversary thereof (the “ Initial Term ”) The Company and Employee agree that on the fourth anniversary of the Effective Date, and each anniversary of the Effective Date thereafter, the employment period shall be extended by one year (the Initial Term as from time to time extended or renewed, the “ Employment Term ”) unless, at least six (6) months prior to such anniversary, the Company or Employee delivers a written notice (a “ Notice of Non-Renewal ”) to the other party that the employment period shall not be so extended. 2. Agreement of Employment . Effective as of the Effective Date, the Company agrees to, and hereby does, employ Employee, and Employee agrees to, and hereby does, accept continued employment by the Company, in a full-time capacity as Executive Vice President & Chief Financial Officer pursuant to the provisions of this Agreement and of the bylaws of the Company, and subject to the control of the individual or individuals to whom Employee reports and the Company’s Board of Directors (the “ Board ”). 3. Employee’s Obligations . During the period of his or her service under this Agreement, Employee shall devote substantially all of his or her time and energy during business hours to the benefit of the Company's business. Employee agrees to serve the Company diligently and to the best of his or her ability, and to follow the policies and directions of the Company. Employee represents and warrants that he or she is not subject to any employment, severance, non-competition or other similar arrangement, and Employee agrees and covenants that the execution of this Agreement by Employee does not violate, conflict with, result in a breach or require any consent, waiver or approval any contract, arrangement or other agreement that Employee is a party to or by which Employee is bound by. 4. Compensation . 4.1 Base Salary . As compensation for all services performed by Employee under and during the Employment Term, the Company shall pay to Employee a base salary at the rate of $700,000 (seven hundred thousand dollars) per year, in equal bi-weekly installments in accordance with its customary payroll practices. Such base salary, as may be increased from time to time at the Company’s sole discretion, is hereafter referred to as the “ Base Salary .” All payments will be subject to Employee’s chosen benefit deductions and the deductions of payroll taxes and similar assessments as required by law. 4.2 Bonus . Employee will participate in the Company’s annual incentive bonus program(s) applicable to Employee’s position, in accordance with the terms of such program(s), and shall have the opportunity to earn an annual bonus thereunder based on the achievement of performance objectives determined by the Board. If Employee dies or resigns pursuant to this Agreement or pursuant to any other agreement between the Company and Employee providing for such resignation during the period of this Agreement, service for any part of the month in which any such event occurs shall be considered service for the entire month. 4.3 Lump Sum Bonus . (i) Employee will receive a lump sum payment of One Hundred Fifty Thousand Dollars ($150,000.00) (less standard deductions) (“Signing Bonus”), paid as soon as practical after signing this Agreement, as further consideration for the restrictive covenants set forth in Section 11. If Employee voluntarily leaves employment with the Company (unless Employee resigns for Good Reason, as defined herein) or if Executive is terminated for Cause, as defined herein, Executive will be obligated to repay the Signing Bonus to the Company in accordance with the following schedule. References to “Separation Date” in this Agreement refer to the last date of Executive’s employment by the Company: Separation Date Repayment Amount Prior to 365 days after Executive’s start date Full Signing Bonus More than 365 days, but less than 730 days 50% of Signing Bonus More than 730 days None (ii) As to paragraph 4.3(i), Executive authorizes the Company to deduct any repayment amounts owed by Executive from Executive’s last pay check, and from any unpaid bonuses, to the extent permitted by law, and Employee agrees to execute any papers required by law to allow Company to withhold such amounts. To the extent any balance remains after said withholding(s), Executive acknowledges and agrees that the remaining balance is a debt owed to the Company by Executive. Executive’s repayment of all or part of the Signing Bonus under this Section does not relieve Employee of any obligations under Section 11 or 12. 5. Equity Award . Employee is eligible for the grant of options (the “ Options ”) to purchase shares of common stock of the Company (the “ Option Shares ”) pursuant to the 2012 Caesars Entertainment Corporation Management Performance Incentive Plan, as amended (the “ Option Plan ”) or any successor plans. All grants of Options, if any, are subject to the review and approval of the Board or the Human Resources Committee of the Board, and Employee acknowledges and agrees that Employee has no right to the grant of any Options. 6. Benefits . During the Employment Term, except as otherwise provided herein, Employee shall be entitled to participate in any and all incentive compensation and bonus arrangements maintained by the Company for its similarly-situated employees and to receive benefits and perquisites at least as favorable to Employee as those presently provided to Employee by the Company. 6.1 Health Insurance . Employee will receive the regular group health plan coverage(s) provided to similarly situated employees, which coverage(s) may be subject to generally applicable changes during the Employment Term, provided that such changes are generally applicable to similarly situated employees. Employee will be required to contribute to the cost of the basic plan in the same manner as other similarly situated officers. Employee will receive coverage under no less favorable a health plan than other similarly situated employees. 6.2 Long Term Disability Benefits . Employee will be eligible to receive long term disability coverage paid by the Company in accordance with the terms of the Company’s policies. 6.3 Life Insurance . Employee will receive life insurance paid by the Company in accordance with the terms of the Company’s policies as in effect from time to time, which policies may be subject to changes during the Employment Term, provided that such changes are generally applicable to similarly situated employees. 6.4 Retirement Plan . Employee will also be eligible during the Employment Term to participate in the Company’s 401(k) Plan, as may be modified or changed. In addition, Employee will also be eligible during the Employment Term to participate in the Company’s deferred compensation plan, as may be modified or changed from time to time, in the same manner as other similarly situated employees of the Company. 6.5 Financial Counseling . During the Employment Term, Employee will also receive financial counseling in accordance with the terms of the Company’s policies as in effect from time to time, which policies may be subject to changes during the Employment Term, provided that such changes are generally applicable to similarly situated employees. 6.6 Vacation . Employee will be entitled to paid vacation in accordance with the terms of the Company’s policies. 6.7 Reimbursement of Expenses . The Company shall pay, or will reimburse Employee for, reasonable business expenses incurred in the performance of Employee’s duties hereunder in accordance with Company policy. 6.8 D&O Insurance . The Company shall provide Employee with Director’s and Officer’s indemnification insurance coverage, in amount and scope that is customary for a company of the Company’s size and nature, in accordance with the terms of the Company’s policies as in effect from time to time, which policies may be subject to changes during the Employment Term, provided that such changes are generally applicable to similarly situated employees. 6.9 Reimbursements; In-Kind Benefits . To the extent that any amount eligible for reimbursement or any in-kind benefit provided under this Agreement is deferred compensation subject to the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”), the following rules shall apply: (a) Payment of such reimbursements shall be made no later than the end of Employee’s taxable year following the taxable year in which the expense is incurred; (b) All such amounts eligible for reimbursement or any in-kind benefit provided under this Agreement in one taxable year shall not affect the amount eligible for reimbursement or in-kind benefits to be provided in any other taxable year; and (c) The right to any such reimbursement or in-kind benefit hereunder shall not be subject to liquidation or exchange for any other benefit. The parties intend that all reimbursements or in-kind benefits provided for hereunder will be made in a manner that makes such reimbursements and in-kind benefits consistent with or exempt from Section 409A of the Code. 7. Reserved . 8. Termination of Employment . The following provisions shall govern Employee’s rights to severance benefits (if any) upon a termination of his or her employment. 8.1 Termination Without Cause; Resignation for Good Reason; Company Failure to Renew. (a) The Board and the Company reserve the right to terminate the Employment Term and Employee from his or her then current position without Cause (as defined in Section 10.1 herein) at any time. Employee reserves the right to terminate the Employment Term and resign from his or her position for Good Reason (as defined in Section 10.2 herein) by giving the Company thirty (30) days written notice which states the basis for such Good Reason. (b) Upon (x) the Company’s termination of Employee’s employment without Cause, (y) a termination of Employee’s employment at the end of the Employment Term due to the Company’s delivery to Employee of a Notice of Non-Renewal in accordance with Section 1 hereof (it being understood and agreed that (1) the Company’s obligations pursuant to this Section 8.1(b)(y) shall survive until fully discharged, notwithstanding the conclusion or expiration of the Employment Term and (2) for purposes of the Management Investor Rights Agreement, dated as of January 28, 2008, as amended, among Caesars Entertainment Corporation and the other parties thereto, the termination of Employee’s employment with the Company at the end of the Employment Term due to the Company’s delivery to Employee of a Notice of Non-Renewal in accordance with Section 1 shall be treated as a termination of Employee’s employment without Cause) or (z) Employee’s resignation from his or her position for Good Reason as described in Section 8.1(a) above: (i) The Company shall pay Employee, within thirty (30) days following his or her termination of employment, Employee’s unreimbursed business expenses and Base Salary through the date of termination (to the extent not theretofore paid) (the “ Payments Owed ”); (ii) Subject to Employee executing and not revoking the release attached hereto as Exhibit B , the Company will pay Employee: an amount equal to 1.5 times Executive’s Base Salary in effect at the time of termination, minus all applicable payroll withholdings (the “Severance Payment”), paid in approximately equal installments over the eighteen (18) month period following such termination (the “Severance Period”). If applicable, Employee will be entitled to receive the benefits set forth on Exhibit A hereto during the Severance Period. Subject to the following sentence, the installments of the Severance Payment will be paid to Employee in accordance with the Company’s customary payroll practices, and will commence on the first payroll date following the termination of Employee’s employment. Notwithstanding the foregoing, if, as of the date of termination, Employee is a “specified employee” as defined in subsection (a)(2)(B)(i) of Section 409A of the Code (“ Specified Employee ”), installments of the Severance Payments will not commence, until the first business day after the date that is six months following Employee’s “separation from service” within the meaning of subsection (a)(2)(A)(i) of Section 409A of the Code (the “ Delayed Payment Date ”) and, on the Delayed Payment Date, the Company will pay to Employee a lump sum equal to all amounts that would have been paid during the period of the delay if the delay were not required plus interest on such amount at a rate equal to the short-term applicable federal rate then in effect, and will thereafter continue to pay Employee the Severance Payment in installments in accordance with this Section; and (iii) Employee’s Options and Option Shares will be treated in accordance with the terms of the Option Plan. (c) Except as otherwise provided in this Agreement, and except for any vested benefits under any tax qualified pension plans of the Company and vested deferred compensation under any applicable deferred compensation plans, and continuation of health insurance benefits on the terms and to the extent required by Section 4980B of the Code and Section 601 of the Employee Retirement Income Security Act of 1974, as amended (which provisions are commonly known as “ COBRA ”), neither the Company nor Employee shall have any additional obligations under this Agreement. 8.2 Termination for Cause or Resignation Without Good Reason. (a) The Company will have the right to terminate the Employment Term and Employee’s employment with the Company at any time from his or her then-current positions for Cause (as defined in Section 10.1 herein). Employee will have the right to resign his or her employment at any time without Good Reason (as defined in Section 10.2 herein). A resignation by Employee without Good Reason shall not be a breach of this Agreement. (b) If the Employment Term and Employee’s employment are terminated for Cause, or if he or she resigns from his or her position without Good Reason, then: (i) Employee’s employment shall be deemed terminated on the date of such termination or resignation; (ii) Employee shall be entitled to receive all Payments Owed from the Company within thirty (30) days following such termination; and (iii) his or her rights with respect to his or her Options and Option Shares will be as set forth in the Option Plan. (c) Except as otherwise provided in this Agreement, and except for any vested benefits under any tax qualified pension plans of the Company and vested deferred compensation under any applicable deferred compensation plans, and continuation of health insurance benefits on the terms and to the extent required by COBRA, neither the Company nor Employee shall have any additional obligations under this Agreement. 8.3 Death. (a) In the event that the Employment Term and Employee’s employment are terminated due to his or her death, (i) Employee’s right to receive his or her Base Salary and benefits under this Agreement (other than the Payments Owed) will terminate, and his or her estate and beneficiary(ies) will receive the benefits they are entitled to receive under the terms of the Company’s benefit plans and programs by reason of a participant’s death during active employment, (ii) Employee’s estate shall be entitled to receive all Payments Owed from the Company within thirty (30) days following such termination and (iii) Employee’s Options and Option Shares will be treated in accordance with the terms of the Option Plan. For the avoidance of doubt, Employee’s estate shall be an express third party beneficiary of this provision, with the right to enforce the provision for and on behalf of Employee’s beneficiary(ies). (b) If Employee dies at a time when the Company owes Employee any Severance Payment(s) pursuant to Section 8.1(b), the Company shall pay such remaining Severance Payment(s) in a lump sum to Employee’s estate. (c) Except as otherwise provided in this Agreement, and except for any vested benefits under any tax qualified pension plans of the Company and vested deferred compensation under any applicable deferred compensation plans, and continuation of health insurance benefits on the terms and to the extent required by COBRA, neither the Company nor Employee shall have any additional obligations under this Agreement. 8.4 Disability. (a) If the Employment Term and Employee’s employment are terminated by reason of Employee’s disability (as defined below), he or she will be entitled to apply, at his or her option, for the Company’s long-term disability benefits and, if he or she is accepted for such benefits, then Employee’s Options and Option Shares will be treated in accordance with the terms of the Option Plan, and the terms and provisions of the Company’s benefit plans and programs that are applicable in the event of such disability of an employee shall apply in lieu of the salary and benefits under this Agreement, except that: (i) Employee will be paid his or her Payments Owed within thirty (30) days of termination; (ii) Employee will receive eighteen (18) months of Base Salary continuation (the “ Salary Continuation Payment ”), offset by any long term disability benefits to which he or she is entitled during such period of salary continuation. In addition to payment of his or her Base Salary, Employee will be entitled to all benefits during the salary continuation period. Notwithstanding the foregoing, if, as of the date of termination pursuant to this Section 8.4, Employee is a Specified Employee, installments of the Salary Continuation Payment will not commence until the Delayed Payment Date and, on the Delayed Payment Date, the Company will pay to Employee a lump sum equal to all amounts that would have been paid during the period of the delay if the delay were not required plus interest on such amount at a rate equal to the short-term applicable federal rate then in effect, and will thereafter continue to pay Employee the Salary Continuation Payment in installments in accordance with this Section. (b) If Employee is disabled so that he or she cannot perform his or her duties, then the Company may terminate his or her duties under this Agreement after giving Employee thirty (30) days’ notice of such termination (during which period Employee shall not have returned to full time performance of his or her duties). For purposes of this Agreement, disability will be the inability of Employee, with or without a reasonable accommodation, to perform the essential functions of his or her job for one hundred and eighty (180) days during any three hundred and sixty five (365) consecutive calendar day period as reasonably determined by the Committee (excluding Employee) based on independent medical advice from a physician who has examined Employee (such physician to be selected by the Company and reasonably acceptable to Employee). (c) Except as otherwise provided in this Agreement, and except for any vested benefits under any tax qualified pension plans of the Company and vested deferred compensation under any applicable deferred compensation plans, and continuation of health insurance benefits on the terms and to the extent required by COBRA, neither the Company nor Employee shall have any additional obligations under this Agreement. 9. Voluntary Termination Notice Period. Employee may terminate this Agreement at any time for any or no reason during its term upon thirty (30) days’ prior written notice to the Company, except as specified in this Section. If Employee is going to work or act in competition with the Company or its affiliates as described in Section 11 of this Agreement, Employee must give the Company six (6) months’ prior written notice of his or her intention to do so. The written notice provided by Employee shall specify the last day to be worked by Employee (the " Separation Date "), which Separation Date must be at least thirty (30) days or up to six (6) months (as appropriate) after the date the notice is received by the Company (it being understood that Employee shall not work or act in competition with the Company or its affiliates as described in Section 11 of this Agreement for the six (6) month period following delivery of the written notice referenced in the immediately preceding sentence without the prior written consent of the Company). Unless otherwise specified herein, or in a writing executed by both parties, Employee shall not receive any of the benefits provided in this Agreement after the Separation Date except for applicable rights and benefits that apply to employees generally after their termination of employment. 10. Definitions of Cause and Good Reason . 10.1 (1) For purposes of this Agreement, “ Cause ” shall mean: (i) The willful failure of Employee to substantially perform Employee’s duties with the Company (as described in Section 2 and Section 3), or to comply with the policies and procedures of the Company (as determined in the sole discretion of the Company), or to follow a lawful, reasonable directive from Employee’s direct or indirect supervisors or such other executive officer to whom Employee reports (other than any such failure resulting from incapacity due to physical or mental illness); (ii) (A) Any willful act of fraud, or embezzlement or theft, by Employee, in each case, in connection with Employee’s duties hereunder or in the course of Employee’s employment hereunder or (B) Employee’s admission in any court, or conviction of, or plea of nolo contendere to, a felony; (iii) Employee being found unsuitable for or having a gaming license denied or revoked by the gaming regulatory authorities in any jurisdiction in which the Company or Caesars Entertainment Corporation, or any of their respective subsidiaries or affiliates conducts gaming operations; (iv) (A) Employee’s willful and material violation of, or noncompliance with, any securities laws or stock exchange listing rules, including, without limitation, the Sarbanes-Oxley Act of 2002, provided that such violation or noncompliance resulted in material economic harm to the Company, or (B) a final judicial order or determination prohibiting Employee from service as an officer pursuant to the Securities and Exchange Act of 1934 or the rules of the New York Stock Exchange or NASDAQ, as applicable; or (v) A breach by Employee of Section 11 or Section 12 of this Agreement. (d) For purposes of this Section 10, no act or failure to act on the part of Employee shall be considered “willful” unless it is done, or omitted to be done, by Employee in bad faith and without reasonable belief that Employee’s action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by Employee in good faith and in the best interests of the Company. The cessation of employment of Employee shall not be deemed to be for Cause unless and until Employee has been provided with written notice of the claim(s) against him or her under the above provision(s) and a reasonable opportunity (not to exceed thirty (30) days) to cure, if possible. 10.2 For purposes of this Agreement, “ Good Reason ” shall mean, without Employee’s express written consent, the occurrence of any of the following circumstances unless such circumstances are fully corrected prior to the date of termination specified in the written notice given by Employee notifying the Company of his or her intention to terminate his or her Employment for Good Reason: (d) A reduction by the Company in Employee’s annual Base Salary, as the same may be increased from time to time pursuant to Section 4.1 hereof, other than a reduction in base salary that applies to a similarly situated class of employees of the Company or its affiliates; (e) (i) The failure by the Company to pay or provide to Employee any material portion of his or her then current Base Salary or then current benefits hereunder (except pursuant to a compensation deferral elected by Employee) or (ii) the failure to pay Employee any material portion of deferred compensation under any deferred compensation program of the Company within thirty (30) days of the date such compensation is due and permitted to be paid under Section 409A of the Code, in each case other than any such failure that results from a modification to any compensation arrangement or benefit plan that is generally applicable to similarly situated officers; or (f) The Company’s failure to obtain a satisfactory agreement from any successor to assume and agree to perform this Agreement, as contemplated in Section 16 hereof. 11. Non-Competition Agreement . During the Employment Term (so long as Employee remains employed by the Company or its affiliates) and for a period following the termination of Employee’s employment with the Company and its affiliates equal to the Non-Compete Period (as defined below), he or she will not, directly or indirectly, engage in any activity, including development activity, whether as an employer, employee, consultant, director, investor, contractor, or otherwise, directly or indirectly, which is in competition with the casino, casino/hotel and/or casino/resort businesses conducted by the Company or any of its parents, subsidiaries or affiliates in the United States, Canada or Mexico or such other location that the Company or an affiliate of the Company conducts significant business operations (a) with respect to periods prior to the termination of Employee’s employment with the Company and its affiliates, at any time during Employee’s active employment period and (b) with respect to periods following the termination of Employee’s employment with the Company and its affiliates, any location that the Company or an affiliate of the Company conducted significant business operations at any time during the twelve months preceding the termination of Employee’s employment with the Company and its affiliates. Notwithstanding anything herein to the contrary, this Section 11.1 shall not prevent Employee from: (i) acquiring securities representing not more than 1% of the outstanding voting securities of any entity the securities of which are traded on a national securities exchange or in the over the counter market; or (ii) obtaining employment in the hotel/resort industry for an entity that does not engage in the casino business. Employee acknowledges that the restrictions described herein are reasonable as to both time and geographic scope, as the Company competes for customers with all gaming establishments in these areas. For purposes of this Agreement, “ Non-Compete Period ” shall mean the following: (w) if the Employee has voluntarily terminated employment with the Company without Good Reason, the notice period under Section 9 (including for the avoidance of doubt, the six-month notice period in the event Employee is going to work or act in competition with the Company as described in Section 12 of this Agreement); (x) (1) if the Company has terminated Employee’s employment with the Company without Cause, (2) if Employee has terminated employment with the Company with Good Reason, or (3) if the Company delivers to Employee a Notice of Non-Renewal in accordance with Section 1, the period during which the Company is obligated to pay Employee severance pursuant to Section 8.1; (y) if the Company has terminated Employee’s employment with the Company for Cause, six (6) months; or (z) if the Employee’s employment with the Company is terminated due to disability, the salary continuation period pursuant to Section 8.4. 11.1 If Employee breaches any of the covenants in Section 11.1, then the Company may terminate any of his or her rights under this Agreement, whereupon all of the Company’s obligations under this Agreement shall terminate without further obligation to him or her except for obligations that have been paid (except as otherwise provided in Section 11.6), accrued or are vested as of or prior to such termination date. In addition, the Company shall be entitled to seek to enforce any such covenants, including obtaining monetary damages, specific performance and injunctive relief. Employee’s Options and Option Shares will be treated in accordance with the terms of the Option Plan. 11.2 During the Employment Term (so long as Employee remains employed by the Company or its affiliates) and for a period of eighteen (18) months following the termination of Employee’s employment with the Company and its affiliates, Employee will not, directly or indirectly hire, induce, persuade or attempt to induce or persuade, any Salary Grade 10 or higher employee of the Company or its subsidiaries or affiliates, to leave or abandon employment with the Company, its subsidiaries or affiliates, for any reason whatsoever (other than Employee’s personal secretary and/or assistants). 11.3 During the Employment Term (so long as Employee remains employed by the Company or its affiliates) and for a period of eighteen (18) months following the termination of Employee’s employment with the Company and its affiliates, Employee will not communicate with employees, customers, or suppliers of the Company, or its subsidiaries or affiliates of the Company or any principals or employee thereof, or any person or organization in any manner whatsoever that is detrimental to the business interests of the Company, its subsidiaries or affiliates. Employee further agrees from the end of Employee’s full-time employment with the Company and its affiliates not to make statements to the press or general public with respect to the Company or its subsidiaries or affiliates that are detrimental to the Company, its subsidiaries, affiliates or employees without the express written prior authorization of the Company, and the Company agrees that it will not make statements to the press or general public with respect to Employee that are detrimental to him or her without the express written prior authorization of Employee. Notwithstanding the foregoing, Employee shall not be prohibited at the expiration of the non-competition period from pursuing his or her own business interests that may conflict with the interests of the Company. 11.4 Each of Employee and the Company intends and agrees that if, in any action before any court, agency or arbitration tribunal legally empowered to enforce the covenants in this Section 11, any term, restriction, covenant or promise contained herein is found to be unreasonable and, accordingly, unenforceable, then such term, restriction, covenant or promise shall be deemed modified to the extent necessary to make it enforceable by such court, agency or arbitration tribunal. 11.5 Each of the Employee and the Company intends and agrees that if, in any action before any court, agency, or arbitration tribunal legally empowered to enforce the covenants in this Section 11, and term, restriction, covenant or promise contained herein is found to be unreasonable and, accordingly, unenforceable, then such term, restriction, covenant or promise shall be deemed modified to the extent necessary to make it enforceable by such court, agency, or arbitration tribunal. 11.6 Should any court, agency or arbitral tribunal legally empowered to enforce the covenants contained in this Section 11 find that Employee has breached the terms, restrictions, covenants or promises herein in any material respect (except to the extent it has been modified to make it enforceable): (a) the Company will not be obligated to continue to pay Employee the salary or benefits provided for under the severance provisions contained in the Agreement (including all required benefits under benefit plans), and (b) Employee will reimburse the Company any severance benefits received after the date of termination as well as any reasonable costs and attorney fees necessary to secure such repayments. For the avoidance of doubt, the Company shall be entitled to money damages and/or injunctive relief due to Employee’s breach of the terms, restrictions, covenants or promises contained in this Section 11 without regard to whether or not such breach is material, it being understood that the limiting effect of the phrase “in any material respect” in the immediately preceding sentence shall operate solely with respect to the remedies available pursuant to this Section 11.6. 11.7 For the avoidance of doubt, for purposes of this Section 11, “Employee's employment” shall not include any period of salary continuation hereunder. 11.8 This Section and all of its provisions will survive Employee’s separation from employment for any reason. 12. Confidentiality . 12.1 Employee’s position with the Company will or has resulted in his or her exposure and access to confidential and proprietary information which he or she did not have access to prior to holding the position, which information is of great value to the Company and the disclosure of which by him or her, directly or indirectly, would be irreparably injurious and detrimental to the Company. During his or her term of employment and without limitation thereafter, Employee agrees to use his or her best efforts and to observe the utmost diligence to guard and protect all confidential or proprietary information relating to the Company from disclosure to third parties. Employee shall not at any time during and after the end of his or her full-time active employment, make available, either directly or indirectly, to any competitor or potential competitor of the Company or any of its subsidiaries, or their affiliates, or divulge, disclose, communicate to any firm, corporation or other business entity in any manner whatsoever, any confidential or proprietary information covered or contemplated by this Agreement, unless expressly authorized to do so by the Company in writing. Notwithstanding the above, Employee may provide such Confidential Information if ordered by a federal or state court, arbitrator or any governmental authority, pursuant to subpoena, or as necessary to secure legal and financial counsel from third party professionals or to enforce his or her rights under this Agreement. In such cases, Employee will use his or her reasonable best efforts to notify the Company, at least five (5) business days prior to providing such information, including the nature of the information required to be provided. 12.2 For the purpose of this Agreement, “ Confidential Information ” shall mean all information of the Company, its subsidiaries and affiliates relating to, or useful in connection with, the business of the Company, its subsidiaries and affiliates, whether or not a “trade secret” within the meaning of applicable law, which is not generally known to the general public and which has been or is from time to time disclosed to, or developed by, Employee as a result of his or her employment with the Company. Confidential Information includes, but is not limited to, the Company’s product development and marketing programs, data, future plans, formula, food and beverage procedures, recipes, finances, financial management systems, player identification systems (Total Rewards), pricing systems, client and customer lists, organizational charts, salary and benefit programs, training programs, computer software, business records, files, drawings, prints, prototyping models, letters, notes, notebooks, reports, and copies thereof, whether prepared by him, her or others, and any other information or documents which Employee is told or reasonably ought to know that the Company regards as confidential. 12.3 Employee agrees that upon separation from employment for any reason whatsoever, he or she shall promptly deliver to the Company all Confidential Information, including but not limited to documents, reports, correspondences, computer printouts, work papers, files, computer lists, telephone and address books, rolodex cards, computer tapes, disks, and any and all records in his or her possession (and all copies thereof) containing any such Confidential Information, and all items created in whole or in part by Employee within the scope of his or her employment even if the items do not contain Confidential Information. 12.4 Employee shall also be required to sign a non-disclosure or confidentiality agreement if Employee is not currently a party to such an agreement with the Company. Such agreement shall also remain in full force and effect, provided that , in the event of any conflict between any such agreement(s) and this Agreement, this Agreement shall control. The form of non-disclosure or confidentiality agreement is attached hereto as Exhibit C . 12.5 This Section and all of its provisions will survive Employee’s separation from employment for any reason. 13. Injunctive Relief . Employee acknowledges and agrees that the terms provided in Sections 11 and 12 are the minimum necessary to protect the Company, its affiliates and subsidiaries, and their successors and assigns, in the use and enjoyment of the Confidential Information and the good will of the business of the Company. Employee further agrees that damages cannot fully and adequately compensate the Company in the event of a breach or violation of the restrictive covenants set forth herein and that without limiting the right of the Company to pursue all other legal and equitable remedies available to it, the Company shall be entitled to seek injunctive relief, including but not limited to a temporary restraining order, preliminary injunction and permanent injunction, to prevent any such violations or any continuation of such violations for the protection of the Company. The granting of injunctive relief will not act as a waiver by the Company of its right to pursue any and all additional remedies. 14. Post Employment Cooperation . Employee agrees that upon separation from employment for any reason from the Company, Employee will cooperate in assuring an orderly transition of all matters being handled by him or her. Upon the Company providing reasonable notice to him or her, he or she will also appear as a witness at the Company’s request and/or assist the Company in any litigation, bankruptcy or similar matter in which the Company or any affiliate thereof is a party or otherwise involved. The Company will defray any reasonable out-of-pocket expenses incurred by Employee in connection with any such appearance. In connection therewith, the Company agrees to indemnify Employee as prescribed in Article Tenth of the Certificate of Incorporation, as amended, of the Company. 15. Release . Upon the termination of Employee’s active full-time employment, and in consideration of and as a condition to the actual receipt of all compensation and benefits described in this Agreement (including without limitation any severance payments pursuant to this Agreement), except for claims arising from the covenants, agreements, and undertakings of the Company as set forth herein and except as prohibited by statutory language, Employee and the Company will enter into an agreement which forever and unconditionally waives and releases Caesars Entertainment Corporation, Caesars Entertainment Operating Company, Inc., their subsidiaries and affiliates, and their officers, directors, agents, benefit plan trustees, and employees from any and all claims, whether known or unknown, and regardless of type, cause or nature, including but not limited to claims arising under all salary, vacation, insurance, bonus, stock, and all other benefit plans, and all state and federal anti-discrimination, civil rights and human rights laws, ordinances and statutes, including Title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act, concerning Employee’s employment with Caesars Entertainment Corporation, Caesars Entertainment Operating Company, Inc., its subsidiaries and affiliates, the cessation of that employment and Employee’s service as a shareholder, employee, officer and director of the Company and its subsidiaries. The form of release is set forth in Exhibit B . 16. Assumption of Agreement on Merger, Consolidation or Sale of Assets . In the event the Company agrees to (a) enter into any merger or consolidation with another company in which the Company is not the surviving company or (b) sell or dispose of all or substantially all of its assets, and the company which is to survive fails to make a written agreement with Employee to either: (1) assume the Company’s financial obligations to Employee under this Agreement or (2) make such other provision for Employee as is reasonably satisfactory to Employee, then Employee shall have the right to resign for Good Reason as defined under this Agreement. 17. Assurances on Liquidation . The Company agrees that until the termination of this Agreement as above provided, it will not voluntarily liquidate or dissolve without first making a full settlement or, at the discretion of Employee, a written agreement with Employee satisfactory to and approved by him or her in writing, in fulfillment of or in lieu of its obligations to him or her under this Agreement. 18. Amendments; Entire Agreement . This Agreement may not be amended or modified orally, and no provision hereof may be waived, except in a writing signed by the parties hereto. This Agreement and the Option Plan contain the entire agreement between the parties concerning the subject matter hereof and supersede all prior agreements and understandings, written and oral, between the parties with respect to the subject matter of this Agreement and the Option Plan, including without limitation the Prior Employment Agreement. 19. Assignment . 19.1 Except as otherwise provided in Section 19.2, this Agreement cannot be assigned by either party hereto, except with the written consent of the other. Any assignment of this Agreement by either party shall not relieve such party of its or his or her obligations hereunder. 19.2 The Company may elect to perform any or all of its obligations under this Agreement through a subsidiary or affiliate, and if the Company so elects, Employee will be an employee of such subsidiary or affiliate. Notwithstanding any such election, the Company’s obligations to Employee under this Agreement will continue in full force and effect as obligations of the Company, and the Company shall retain primary liability for their performance. 20. Binding Effect . This Agreement shall be binding upon and inure to the benefit of the personal representatives and successors in interest of the Company. 21. Governing Law . This Agreement shall be governed by the laws of the State of Nevada as to all matters, including but not limited to matters of validity, construction, effect and performance. 22. Jurisdiction . Any judicial proceeding seeking to enforce any provision of, or based on any right arising out of, this Agreement or any agreement identified herein may be brought only in state or federal courts of the State of Nevada, located in Clark County, Nevada, and by the execution and delivery of this Agreement, each of the parties hereto accepts for themselves the exclusive jurisdiction of the aforesaid courts and irrevocably consents to the jurisdiction of such courts (and the appropriate appellate courts) in any such proceedings, waives any objection to venue laid therein and agrees to be bound by the judgment rendered thereby in connection with this Agreement or any agreement identified herein. 23. Notices . Any notice to be given hereunder by either party to the other may be effected by personal delivery, in writing, or by mail, registered or certified, postage prepaid with return receipt requested. Mailed notices shall be addressed to the parties at the addresses set forth below, but each party may change his, her or its address by written notice in accordance with this Section 23. Notices shall be deemed communicated as of the actual receipt or refusal of receipt. If to Employee: ________________________________ ________________________________ 24. Construction . This Agreement is to be construed as a whole, according to its fair meaning, and not strictly for or against any of the parties. 25. Severability . If any provision of this Agreement shall be determined by a court to be invalid or unenforceable, the remaining provisions of this Agreement shall not be affected thereby, shall remain in full force and effect, and shall be enforceable to the fullest extent permitted by applicable law. 26. Withholding Taxes . Any payments or benefits to be made or provided to Employee pursuant to this Agreement shall be subject to any withholding tax (including social security contributions and federal income taxes) as shall be required by federal, state, and local withholding tax laws. 27. Counterparts . This Agreement may be executed by the parties in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same agreement. IN WITNESS WHEREOF, Employee has hereunto set his or her hand and the Company has caused this Agreement to be executed in its name and on its behalf and its corporate seal to be hereunto affixed and attested by its corporate officers thereunto duly authorized. /s/ Donald Colvin Donald Colvin Caesars Entertainment Operating Company, Inc. By: /s/ Mary Thomas Name: Mary Thomas Its: ___ EVP HR_________________________ If to Company: Caesars Entertainment Operating Company, Inc. One Caesars Palace Drive Las Vegas, NV 89109 Attn: General Counsel Exhibit A • Medical Insurance (including health, dental and vision) • Life Accident Insurance • Accrued benefits under Savings and retirement plan • D&O Insurance • Financial Counseling (in accordance with Company policy, maximum benefit is funds allocated as of Separation Date – no new funds) Exhibit B GENERAL RELEASE THIS GENERAL RELEASE (the “ Release ”) is entered into between Caesars Entertainment Operating Company, Inc. (the “ Company ”) and Donald Colvin (the “ Employee ”) as of the _____ day of ________________, _______. The Company and the Employee agree as follows: 1. Employment Status . The Employee’s employment with the Company shall terminate effective as of __________________, ________________ (the “ Separation Date ”). 2. Payment and Benefits . Upon the effectiveness of the terms set forth herein, the Company shall provide the Employee with all of the applicable payments and benefits set forth in the Employment Agreement between the Company and the Employee, dated as of ______, ______ (as amended from time to time, the “ Employment Agreement ”). 3. No Liability . This Release does not constitute an admission by the Company, or any of its subsidiaries, affiliates, divisions, trustees, officers, directors, partners, agents, or employees, or by the Employee, of any unlawful acts or of any violation of federal, state or local laws. 4. Release . In consideration of the payments and benefits set forth in Section 8.1 (Termination Without Cause; Resignation for Good Reason; Company Failure to Renew) of the Employment Agreement, the Employee for himself, his heirs, administrators, representatives, executors, successors and assigns (collectively, “ Employee Releasors ”) does hereby irrevocably and unconditionally release, acquit and forever discharge the Company and each of its subsidiaries, affiliates, divisions, successors, assigns, trustees, officers, directors, partners, agents, attorneys, and former and current employees, including without limitation all persons acting by, through, under or in concert with any of them, including without limitation the Sponsors (as defined in the Management Investor Rights Agreement, dated as of January 28, 2008, as amended, among the Company, Employee and the other parties specified therein) (collectively, “ Company Releasees ”), and each of them from any and all charges, complaints, claims, liabilities, obligations, promises, agreements, controversies, damages, remedies, actions, causes of action, suits, rights, demands, costs, losses, debts and expenses (including attorneys’ fees and costs) of any nature whatsoever, known or unknown, whether in law or equity and whether arising under federal, state or local law and in particular including any claim for discrimination based upon race, color, ethnicity, sex, national origin, religion, disability age (including without limitation under the Age Discrimination in Employment Act of 1967 as amended by the Older Workers Benefit Protection Act (“ ADEA ”), Title VII of the Civil Rights Act of 1964 as amended by the Civil Rights Act of 1991, the Equal Pay Act of 1962, and the Americans with Disabilities Act of 1990) or any other unlawful criterion or circumstance, which Employee Releasors had, now have, or may have or claim to have in the future against each or any of the Company Releasees by reason of any matter, cause or thing occurring, done or omitted to be done from the beginning of the world until the date of the execution of this Release; provided , however , that nothing herein shall release (i) any obligation of Company under Section 8 (Termination of Employment), Section 18 (Amendments; Entire Agreement) or Section 22 (Jurisdiction) of the Employment Agreement or (ii) any right of indemnification or to director and officer liability insurance coverage under any of the company’s organizational documents or at law under any plan or agreement and applicable to the Employee. In addition, nothing in this Release is intended to interfere with the Employee’s right to file a charge with the Equal Employment Opportunity Commission in connection with any claim the Employee believes he may have against the Company Releasees. However, by executing this Release, the Employee hereby waives the right to recover in any proceeding that the Employee may bring before the Equal Employment Opportunity Commission or any state human rights commission or in any proceeding brought by the Equal Employment Opportunity Commission or any state human rights commission on the Employee’s behalf. In addition, this release is not intended to interfere with the Employee’s right to challenge that his waiver of any and all ADEA claims pursuant to this Release is a knowing and voluntary waiver, notwithstanding the Employee’s specific representation to the Company that he has entered into this Agreement knowingly and voluntarily. As of the Separation Date, Employee acknowledges and represents that Employee has not been either directly or indirectly involved in, witnessed or asked or directed to participate in any conduct that could give rise to an allegation that the Company or any of its subsidiaries or affiliates has violated any laws applicable to its businesses or that could otherwise be construed as inappropriate or unethical in any way, even if such conduct is not, or does not appear to be, a violation of any law. Employee confirms that Employee has been given the opportunity to report such conduct to the Company and to third parties and that Employee has not made such report. Employee also confirms that Employee has no charge, complaint or action against the Company or any Company Releasees in any forum or form. 5. Bar . The Employee acknowledges and agrees that if he should hereafter make any claim or demand or commence or threaten to commence any action, claim or proceeding against the Company Releasees with respect to any cause, matter or thing which is the subject of the release under Paragraph 4 of this Release (other than a claim brought to challenge the validity of the waiver of claims brought under the ADEA), this Release may be raised as a complete bar to any such action, claim or proceeding, and the applicable Company Releasee may recover from the Employee all costs incurred in connection with such action, claim or proceeding, including attorneys’ fees. 6. Restrictive Covenants . The Employee acknowledges that the provisions of Section 11 (Non-Competition Agreement) through Section 14 (Post Employment Cooperation), inclusive, of the Employment Agreement shall continue to apply pursuant to their terms. 7. Governing Law . This Release shall be governed by and construed in accordance with the laws of the State of Nevada, without regard to conflicts of laws principles. 8. Acknowledgment . . Employee agrees that by signing this Agreement, Employee waives any claims he may have under the Age Discrimination in Employment Act of 1967 (the ADEA) up to the time Employee signs this Agreement. The parties hereto have read this Release, understand it, and voluntarily accept its terms, and the Employee acknowledges that he has been advised by Company to seek the advice of legal counsel before entering into this Release, and has been provided with a period of twenty-one (21) days in which to consider entering into this Release. 9. Revocation . The Employee has a period of seven (7) days following the execution of this Release during which the Employee may revoke this Release, and this Release shall not become effective or enforceable until such revocation period has expired. If, within the ten (10) day period following such expiration, Company fails to execute this Release, then this Release shall become null and void and have no force or effect. 10. Counterparts . This Release may be executed by the parties hereto in counterparts, which taken together shall be deemed one original. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] IN WITNESS WHEREOF, Employee has hereunto set his or her hand and the Company has caused this Release to be executed in its name and on its behalf and its corporate seal to be hereunto affixed and attested by its corporate officers thereunto duly authorized. Employee Caesars Entertainment Operating Company, Inc. By: Name: Its: ____________________________________________________ Exhibit C EMPLOYEE'S AGREEMENT (CONCERNING PROTECTED AND CONFIDENTIAL COMPANY INFORMATION AND MATERIALS) In consideration of, and as a condition precedent to, my employment and/or continued employment, with Caesars Entertainment Operating Company, Inc., or one of its direct or indirect subsidiaries (hereinafter referred to jointly as the "Company"), and for other good and valuable consideration, including but not limited to any future, additional compensation, bonus, stock options, 401(k) matching contributions and other benefits, I hereby specifically agree as follows: 1. I recognize that the Company is engaged in the business of developing, owning and/or managing casinos and related hotels, as well as other gaming related activity. I understand that the Company has developed and is the owner of certain commercially valuable technical and non-technical information, which is not public knowledge, which is a valuable asset essential to and used in the business of the Company. A non-exhaustive list of examples of such Confidential Information is: computer programs including software related documentation, source codes, object codes, technical plans, processes, methods, practices, algorithms and the reports derived from such processes, manuals and databases; internal financial data; marketing programs, strategies and campaigns; internal manuals; new product development plans and ideas; lists of customers, including those lists obtained and maintained by the Company during my employment; and designs, blueprints, architectural plans and engineering data. I acknowledge that the Confidential Information is proprietary to the Company and that, as such, some of the information, including but not limited to that involving computer programs, is treated as a trade secret by the Company and is also protected by certain copyright laws. I recognize and agree that the Company is engaged in a highly competitive industry and that the maintenance of the secret nature of this information is essential to preserving its value to the Company; that disclosure of any of this information would be detrimental to and cause substantial harm to the Company; and that as I have or may have access to or be informed of such information during the course of my employment, that I am obligated to and will safeguard all such information during my employment with the Company. I further agree that I will not duplicate, reverse engineer, alter, replicate or modify the Confidential Information or any part of the Confidential Information made available to me nor disclose to any third party any Confidential Information. 2. In addition to the information developed and owned by the Company that is confidential, I also understand that certain information received from third parties is also confidential and proprietary. Third parties may include, but not be limited to, any and all tribal entities, business enterprises, or other organizations or individuals who have relationships with the Company. To this end, any information received by me from third parties during any furtherance of my obligations as an employee of the Company which concerns the personal, financial, or other affairs of the third party will be treated in full confidence and will not be revealed to any other persons, firms, or organizations and shall be governed by this Agreement in the same manner as the Company’s confidential and proprietary information. 3. I agree that any work, invention, innovation, idea or report that I produce in connection with my work for the Company, or which results from or is suggested by the work I do for or on behalf of the Company is a "work for hire", and will be the sole property of the Company. (Such work, inventions, innovations, ideas, and reports are referred to as the "Work".) The foregoing applies whether or not the Work was conceived or performed during Company hours or on Company equipment. I agree that I will execute all necessary documents or take other actions necessary to assist the Company in obtaining patents, copyrights or other legal protection of the Work for the Company's benefit (although the Work will be the exclusive property of the Company whether or not patented or copyrighted). 4. I will not at any time, directly or indirectly, either during my employment or for two years thereafter, disclose to any person, corporation or other entity which offers any product or service which is, in any way, in competition with any product or service offered by the Company, or use in competition with the Company, any of the Company's confidential or proprietary information, except on behalf of the Company, without first obtaining the Company's written consent thereto, which consent can be given only by a duly authorized officer of the Company. 5. Upon the termination of my employment for any reason whatsoever, I will promptly deliver to the Company all documents, computer software, files, databases, drawings, prints, prototypes, models, manuals, letters, lists, notes, notebooks, reports and copies thereof, whether prepared by me or others, all other material of a secret, confidential or proprietary nature relating to the Company's business, and any other document relating or referring to such material. 6. If I am or become an employee of the Company in Salary Grade 10 or above (manager or above), I recognize that both I and all others in Salary Grade 10 or above (manager or above) are key employees of the Company who have special and unique knowledge of the Company's operations and personnel and who, as a result of those and other factors, occupy positions of trust and responsibility which bring with them a special duty of care and loyalty to the Company. I recognize that the Company has substantial good will in the casino gaming industry which reaches beyond the Company location at which I am currently employed. I also recognize that the Company has spent substantial time and has incurred substantial expense in maintaining and creating customer good will among its manager-level employees; that the training, experience, skills and unique knowledge of the Company's operation are an integral part of, and are necessary for, an efficient, profitable operation; and that, therefore, the Company has a protectable business interest in maintaining these employees. I understand that my solicitation of any manager-level employee, with whom I have had a reporting relationship (up or down) or other direct contact or association while employed by the Company or thereafter, for employment at a casino and/or related hotel which competes with the Company in the gaming business would cause detrimental and irreparable harm to the Company. Accordingly, neither during my employment with the Company nor for eighteen (18) months following the cessation of that employment will I either directly or indirectly induce, persuade, solicit, or attempt to induce or persuade any Company employee in Salary Grade 10 or above (manager or above) as described above in this paragraph to leave or abandon his/her employment with the Company for employment at a casino and/or related hotel which competes with the Company in the gaming business. I understand that such inducement, persuasion and/or solicitation includes, but is not limited to, recommending that the manager-level employee contact any person affiliated with a competitor of the Company in the gaming business. 7. I understand and agree that a breach by me of any of the obligations set forth above will cause the Company to suffer irreparable harm. Accordingly, I understand and agree that if I breach any of my obligations set forth above, the Company has the right to petition a court for, and to obtain therefrom, an injunction enjoining me from breaching any such obligations. I further understand and agree that, to the extent that they can be proven by the Company, I will be liable for such monetary damages as a result from any breach by me of my obligations set forth above prior to such breach being enjoined by the Company. 8. The Company's rights and my obligations created by this Agreement are intended to be in addition to, and not in limitation of, any obligation I may have, or right the Company may have, under otherwise applicable law. This Agreement replaces any prior "Employee's Agreement (Concerning Protected and Confidential Information and Materials)." Also, this Agreement and the obligations referred to herein are separate from and in addition to any other obligations I may have to the Company. I understand that I have an affirmative obligation to advise any future employer of mine of the existence of this Agreement and to provide said employer with a copy of the Agreement; and that the Company may also advise and provide any future employer a copy of this Agreement. I specifically acknowledge that both my obligations and the Company's remedies hereunder are fair and reasonable. 9. If any provision of this Agreement is held to be unenforceable, I understand and agree that such unenforceability shall not affect any other provision hereof and that the remainder of the Agreement shall be enforceable. I also agree that the Company may assign its rights under this Agreement to any parent, subsidiary, or affiliate or to any successor entity that becomes my employer through any merger, spin-off, reorganization or restructuring. 10. I agree that this Agreement shall be governed by and construed under the laws of the State of Nevada, and I hereby consent to the jurisdiction of the state and federal courts of the State of Nevada, located in Clark County, Nevada, in any action brought by the Company to enforce this Agreement. I further agree that I will pay all costs and expenses, including reasonable attorneys fees, incurred by the Company in enforcing any of my obligations under this Agreement. [Signature Page Follows] COMPANY EMPLOYEE Mary Thomas Printed: Donald Colvin By: /s/ Mary Thomas Signed: /s/ Donald Colvin Its:____ EVP Human Resources __________ Date: 11-14-2012 Date: 11-14-2012 ACKNOWLEDGEMENT The undersigned hereby acknowledges that he/she has received, read and understands the Caesars Entertainment Operating Company, Inc., or one of its direct or indirect subsidiaries, Employee’s Agreement (Concerning Protected and Confidential Company Information and Materials). ________________________________ Signature ________________________________ Printed Name Date: ___________________________ Exhibit 10.86 EMPLOYMENT AGREEMENT THIS AGREEMENT, made as of August 8, 2012, (the “ Effective Date ”) between Caesars Entertainment Operating Company, Inc., with offices at One Caesars Palace Drive, Las Vegas, Nevada (the “ Company ”), and Diane Wilfong (“ Employee ”). The Company and Employee agree as follows: 1. Introductory Statement . The Company desires to secure the services of Employee effective on the Effective Date. This Agreement supersedes any and all employment agreements between the Company or its affiliates or subsidiaries and Employee (the “ Prior Employment Agreement ”); provided that, on the fourth anniversary of the Effective Date and each anniversary of the Effective Date thereafter, the employment period shall be extended by one year unless, at least six (6) months prior to such anniversary, the Company or Employee delivers a written notice (a “ Notice of Non-Renewal ”) to the other party that the employment period shall not be so extended (the Initial Term as from time to time extended or renewed, the “ Employment Term ”). The Company hereby agrees to employ Employee, and Employee hereby agrees to be employed by the Company, subject to the terms and conditions of this Agreement, for a period beginning on the Effective Date and ending on the fourth anniversary thereof (the “ Initial Term ”) 2. Agreement of Employment . Effective as of the Effective Date, the Company agrees to, and hereby does, employ Employee, and Employee agrees to, and hereby does, accept continued employment by the Company, in a full-time capacity as Senior Vice President, Controller and Chief Accounting Officer pursuant to the provisions of this Agreement and of the bylaws of the Company, and subject to the control of the individual or individuals to whom Employee reports, the Senior Management Team of the Company (“ SMT ”), and the Board of Directors (the “ Board ”). 3. Employee’s Obligations . During the period of his or her service under this Agreement, Employee shall devote substantially all of his or her time and energy during business hours to the benefit of the Company's business. Employee agrees to serve the Company diligently and to the best of his or her ability, and to follow the policies and directions of the Company. Employee represents and warrants that he or she is not subject to any employment, severance, non-competition or other similar arrangement, and Employee agrees and covenants that the execution of this Agreement by Employee does not violate, conflict with, result in a breach or require any consent, waiver or approval any contract, arrangement or other agreement that Employee is a party to or by which Employee is bound by. 4. Compensation . 4.1 Base Salary . As compensation for all services performed by Employee under and during the Employment Term, the Company shall pay to Employee a base salary at the rate of $400,925 per year, in equal bi-weekly installments in accordance with its customary payroll practices. Such base salary, as may be increased from time to time at the Company’s sole discretion, is hereafter referred to as the “ Base Salary .” All payments will be subject to Employee’s chosen benefit deductions and the deductions of payroll taxes and similar assessments as required by law. 4.2 Bonus . Employee will participate in the Company’s annual incentive bonus program(s) applicable to Employee’s position, in accordance with the terms of such program(s), and shall have the opportunity to earn an annual bonus thereunder based on the achievement of performance objectives determined by the Board. If Employee dies or resigns pursuant to this Agreement or pursuant to any other agreement between the Company and Employee providing for such resignation during the period of this Agreement, service for any part of the month in which any such event occurs shall be considered service for the entire month. 5. Equity Award . Employee is eligible for the grant of options (the “ Options ”) to purchase shares of common stock of the Company (the “ Option Shares ”) pursuant to the Caesars Entertainment Corporation Management Equity Incentive Plan dated as of February 27, 2008, as amended (the “ Option Plan ”) or any successor plans. All grants of Options, if any, are subject to the review and approval of the Board or the Human Resources Committee of the Board, and Employee acknowledges and agrees that Employee has no right to the grant of any Options. 6. Benefits . During the Employment Term, except as otherwise provided herein, Employee shall be entitled to participate in any and all incentive compensation and bonus arrangements maintained by the Company for its similarly-situated employees and to receive benefits and perquisites at least as favorable to Employee as those presently provided to Employee by the Company. 6.1 Health Insurance . Employee will receive the regular group health plan coverage(s) provided to similarly situated employees, which coverage(s) may be subject to generally applicable changes during the Employment Term, provided that such changes are generally applicable to similarly situated employees. Employee will be required to contribute to the cost of the basic plan in the same manner as other similarly situated officers. Employee will receive coverage under no less favorable a health plan than other similarly situated employees. 6.2 Long Term Disability Benefits . Employee will be eligible to receive long term disability coverage paid by the Company in accordance with the terms of the Company’s policies. 6.3 Life Insurance . Employee will receive life insurance paid by the Company in accordance with the terms of the Company’s policies as in effect from time to time, which policies may be subject to changes during the Employment Term, provided that such changes are generally applicable to similarly situated employees. 6.4 Retirement Plan . Employee will also be eligible during the Employment Term to participate in the Company’s 401(k) Plan, as may be modified or changed. In addition, Employee will also be eligible during the Employment Term to participate in the Company’s deferred compensation plan, as may be modified or changed from time to time, in the same manner as other similarly situated employees of the Company. 6.5 Financial Counseling . During the Employment Term, Employee will also receive financial counseling in accordance with the terms of the Company’s policies as in effect from time to time, which policies may be subject to changes during the Employment Term, provided that such changes are generally applicable to similarly situated employees. 6.6 Vacation . Employee will be entitled to paid vacation in accordance with the terms of the Company’s policies. 6.7 Reimbursement of Expenses . The Company shall pay, or will reimburse Employee for, reasonable business expenses incurred in the performance of Employee’s duties hereunder in accordance with Company policy. 6.8 D&O Insurance . The Company shall provide Employee with Director’s and Officer’s indemnification insurance coverage, in amount and scope that is customary for a company of the Company’s size and nature, in accordance with the terms of the Company’s policies as in effect from time to time, which policies may be subject to changes during the Employment Term, provided that such changes are generally applicable to similarly situated employees. 6.9 Reimbursements; In-Kind Benefits . To the extent that any amount eligible for reimbursement or any in-kind benefit provided under this Agreement is deferred compensation subject to the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”), the following rules shall apply: (a) Payment of such reimbursements shall be made no later than the end of Employee’s taxable year following the taxable year in which the expense is incurred; (b) All such amounts eligible for reimbursement or any in-kind benefit provided under this Agreement in one taxable year shall not affect the amount eligible for reimbursement or in-kind benefits to be provided in any other taxable year; and (c) The right to any such reimbursement or in-kind benefit hereunder shall not be subject to liquidation or exchange for any other benefit. The parties intend that all reimbursements or in-kind benefits provided for hereunder will be made in a manner that makes such reimbursements and in-kind benefits consistent with or exempt from Section 409A of the Code. 7. Reserved . 8. Termination of Employment . The following provisions shall govern Employee’s rights to severance benefits (if any) upon a termination of his or her employment. 8.1 Termination Without Cause; Resignation for Good Reason; Company Failure to Renew. (a) The Board and the Company reserve the right to terminate the Employment Term and Employee from his or her then current position without Cause at any time. Employee reserves the right to terminate the Employment Term and resign from his or her position for Good Reason (as defined in Section 10.2 herein) by giving the Company thirty (30) days written notice which states the basis for such Good Reason. (b) Upon (x) the Company’s termination of Employee’s employment without Cause, (y) a termination of Employee’s employment due to the Company’s delivery to Employee of a Notice of Non-Renewal in accordance with Section 1 hereof (it being understood and agreed that (1) the Company’s obligations pursuant to this Section 8.1(b)(y) shall survive until fully discharged, notwithstanding the conclusion or expiration of the Employment Term and (2) for purposes of the Management Investor Rights Agreement, dated as of January 28, 2008, as amended, among Caesars Entertainment Corporation and the other parties thereto, the termination of Employee’s employment with the Company due to the Company’s delivery to Employee of a Notice of Non-Renewal in accordance with Section 1 shall be treated as a termination of Employee’s employment without Cause) or (z) Employee’s resignation from his or her position for Good Reason as described in Section 8.1(a) above: (i) The Company shall pay Employee, within thirty (30) days following his or her termination of employment, Employee’s unreimbursed business expenses and Base Salary through the date of termination (to the extent not theretofore paid) (the “ Payments Owed ”); (ii) Subject to Employee executing and not revoking the release attached hereto as Exhibit B , the Company will pay Employee: in approximately equal installments during the twelve (12) month period following such termination (the “ Severance Period ”), a cash severance payment in an amount equal to 1.0 multiplied by his or her Base Salary as in effect on the date of termination (the “ Severance Payment ”). If applicable, Employee will be entitled to receive the benefits set forth on Exhibit A hereto during the Severance Period. Subject to the following sentence, the installments of the Severance Payment will be paid to Employee in accordance with the Company’s customary payroll practices, and will commence on the first payroll date following the termination of Employee’s employment. Notwithstanding the foregoing, if, as of the date of termination, Employee is a “specified employee” as defined in subsection (a)(2)(B)(i) of Section 409A of the Code (“ Specified Employee ”), installments of the Severance Payments will not commence, until the first business day after the date that is six months following Employee’s “separation from service” within the meaning of subsection (a)(2)(A)(i) of Section 409A of the Code (the “ Delayed Payment Date ”) and, on the Delayed Payment Date, the Company will pay to Employee a lump sum equal to all amounts that would have been paid during the period of the delay if the delay were not required plus interest on such amount at a rate equal to the short-term applicable federal rate then in effect, and will thereafter continue to pay Employee the Severance Payment in installments in accordance with this Section; and (iii) In the event Executive’s employment is terminated without cause, as set forth in Paragraph (a), during the eighteen (18) month period immediately following the Company hiring a new CFO, Executive shall also be entitled to a prorated bonus payment at the applicable target percentage based on job grade and company performance, as governed by the applicable Corporate bonus plan document, for the calendar year in which her employment terminated, prorated as follows: (iv) Employee’s Options and Option Shares will be treated in accordance with the terms of the Option Plan. (c) Except as otherwise provided in this Agreement, and except for any vested benefits under any tax qualified pension plans of the Company and vested deferred compensation under any applicable deferred compensation plans, and continuation of health insurance benefits on the terms and to the extent required by Section 4980B of the Code and Section 601 of the Employee Retirement Income Security Act of 1974, as amended (which provisions are commonly known as “ COBRA ”), neither the Company nor Employee shall have any additional obligations under this Agreement. • Terminated in Jan-Mar: 25% of bonus payment • Terminated in Apr-Jun: 50% of bonus payment • Terminated in Jul-Sept: 75% of bonus payment • Terminated in Oct-Dec: 100% of bonus payment 8.2 Termination for Cause or Resignation Without Good Reason. (a) The Company will have the right to terminate the Employment Term and Employee’s employment with the Company at any time from his or her then-current positions for Cause (as defined in Section 10.1 herein). A resignation by Employee without Good Reason shall not be a breach of this Agreement. (b) If the Employment Term and Employee’s employment are terminated for Cause, or if he or she resigns from his or her position without Good Reason, then: (i) Employee’s employment shall be deemed terminated on the date of such termination or resignation; (ii) Employee shall be entitled to receive all Payments Owed from the Company within thirty (30) days following such termination; and (iii) his or her rights with respect to his or her Options and Option Shares will be as set forth in the Option Plan. (c) Except as otherwise provided in this Agreement, and except for any vested benefits under any tax qualified pension plans of the Company and vested deferred compensation under any applicable deferred compensation plans, and continuation of health insurance benefits on the terms and to the extent required by COBRA, neither the Company nor Employee shall have any additional obligations under this Agreement. 8.3 Death. (a) In the event that the Employment Term and Employee’s employment are terminated due to his or her death, (i) Employee’s right to receive his or her Base Salary and benefits under this Agreement (other than the Payments Owed) will terminate, and his or her estate and beneficiary(ies) will receive the benefits they are entitled to receive under the terms of the Company’s benefit plans and programs by reason of a participant’s death during active employment, (ii) Employee’s estate shall be entitled to receive all Payments Owed from the Company within thirty (30) days following such termination and (iii) Employee’s Options and Option Shares will be treated in accordance with the terms of the Option Plan. For the avoidance of doubt, Employee’s estate shall be an express third party beneficiary of this provision, with the right to enforce the provision for and on behalf of Employee’s beneficiary(ies). (b) If Employee dies at a time when the Company owes Employee any Severance Payment(s) pursuant to Section 8.1(b), the Company shall pay such remaining Severance Payment(s) in a lump sum to Employee’s estate. (c) Except as otherwise provided in this Agreement, and except for any vested benefits under any tax qualified pension plans of the Company and vested deferred compensation under any applicable deferred compensation plans, and continuation of health insurance benefits on the terms and to the extent required by COBRA, neither the Company nor Employee shall have any additional obligations under this Agreement. 8.4 Disability. (a) If the Employment Term and Employee’s employment are terminated by reason of Employee’s disability (as defined below), he or she will be entitled to apply, at his or her option, for the Company’s long-term disability benefits and, if he or she is accepted for such benefits, then Employee’s Options and Option Shares will be treated in accordance with the terms of the Option Plan, and the terms and provisions of the Company’s benefit plans and programs that are applicable in the event of such disability of an employee shall apply in lieu of the salary and benefits under this Agreement, except that: (i) Employee will be paid his or her Payments Owed within thirty (30) days of termination; (ii) Employee will receive twelve (12) months of Base Salary continuation (the “ Salary Continuation Payment ”), offset by any long term disability benefits to which he or she is entitled during such period of salary continuation. In addition to payment of his or her Base Salary, Employee will be entitled to all benefits during the salary continuation period. Notwithstanding the foregoing, if, as of the date of termination pursuant to this Section 8.4, Employee is a Specified Employee, installments of the Salary Continuation Payment will not commence until the Delayed Payment Date and, on the Delayed Payment Date, the Company will pay to Employee a lump sum equal to all amounts that would have been paid during the period of the delay if the delay were not required plus interest on such amount at a rate equal to the short-term applicable federal rate then in effect, and will thereafter continue to pay Employee the Salary Continuation Payment in installments in accordance with this Section. (b) If Employee is disabled so that he or she cannot perform his or her duties, then the Company may terminate his or her duties under this Agreement after giving Employee thirty (30) days’ notice of such termination (during which period Employee shall not have returned to full time performance of his or her duties). For purposes of this Agreement, disability will be the inability of Employee, with or without a reasonable accommodation, to perform the essential functions of his or her job for one hundred and eighty (180) days during any three hundred and sixty five (365) consecutive calendar day period as reasonably determined by the Committee (excluding Employee) based on independent medical advice from a physician who has examined Employee (such physician to be selected by the Company and reasonably acceptable to Employee). (c) Except as otherwise provided in this Agreement, and except for any vested benefits under any tax qualified pension plans of the Company and vested deferred compensation under any applicable deferred compensation plans, and continuation of health insurance benefits on the terms and to the extent required by COBRA, neither the Company nor Employee shall have any additional obligations under this Agreement. 9. Voluntary Termination Notice Period. Employee may terminate this Agreement at any time for any or no reason during its term upon thirty (30) days’ prior written notice to the Company, except as specified in this Section. If Employee is going to work or act in competition with the Company or its affiliates as described in Section 11 of this Agreement, Employee must give the Company six (6) months’ prior written notice of his or her intention to do so. The written notice provided by Employee shall specify the last day to be worked by Employee (the " Separation Date "), which Separation Date must be at least thirty (30) days or up to six (6) months (as appropriate) after the date the notice is received by the Company (it being understood that Employee shall not work or act in competition with the Company or its affiliates as described in Section 11 of this Agreement for the six (6) month period following delivery of the written notice referenced in the immediately preceding sentence without the prior written consent of the Company). Unless otherwise specified herein, or in a writing executed by both parties, Employee shall not receive any of the benefits provided in this Agreement after the Separation Date except for applicable rights and benefits that apply to employees generally after their termination of employment. 10. Definitions of Cause and Good Reason . 10.1 (1) For purposes of this Agreement, “ Cause ” shall mean: (i) The failure of Employee to substantially perform Employee’s duties with the Company (as described in Section 2 and Section 3), or to comply with the policies and procedures of the Company (as determined in the sole discretion of the Company), or to follow a lawful, reasonable directive from Employee’s direct or indirect supervisors or such other executive officer to whom Employee reports; (ii) (A) Any willful act of fraud, or embezzlement or theft, by Employee, in each case, in connection with Employee’s duties hereunder or in the course of Employee’s employment hereunder or (B) Employee’s admission in any court, or conviction of, or plea of nolo contendere to, a felony; (iii) Employee being found unsuitable for or having a gaming license denied or revoked by the gaming regulatory authorities in any jurisdiction in which the Company or Caesars Entertainment Corporation, or any of their respective subsidiaries or affiliates conducts gaming operations; (iv) (A) Employee’s willful and material violation of, or noncompliance with, any securities laws or stock exchange listing rules, including, without limitation, the Sarbanes-Oxley Act of 2002, provided that such violation or noncompliance resulted in material economic harm to the Company, or (B) a final judicial order or determination prohibiting Employee from service as an officer pursuant to the Securities and Exchange Act of 1934 or the rules of the New York Stock Exchange or NASDAQ, as applicable; or (v) A breach by Employee of Section 11 or Section 12 of this Agreement. 10.2 For purposes of this Agreement, “ Good Reason ” shall mean, without Employee’s express written consent, the occurrence of any of the following circumstances unless such circumstances are fully corrected prior to the date of termination specified in the written notice given by Employee notifying the Company of his or her intention to terminate his or her Employment for Good Reason: (d) A reduction by the Company in Employee’s annual Base Salary, as the same may be increased from time to time pursuant to Section 4.1 hereof, other than a reduction in base salary that applies to a similarly situated class of employees of the Company or its affiliates; (e) (i) The failure by the Company to pay or provide to Employee any material portion of his or her then current Base Salary or then current benefits hereunder (except pursuant to a compensation deferral elected by Employee) or (ii) the failure to pay Employee any material portion of deferred compensation under any deferred compensation program of the Company within thirty (30) days of the date such compensation is due and permitted to be paid under Section 409A of the Code, in each case other than any such failure that results from a modification to any compensation arrangement or benefit plan that is generally applicable to similarly situated officers; or (f) The Company’s failure to obtain a satisfactory agreement from any successor to assume and agree to perform this Agreement, as contemplated in Section 16 hereof. 11. Non-Competition Agreement . During the Employment Term (so long as Employee remains employed by the Company or its affiliates) and for a period following the termination of Employee’s employment with the Company and its affiliates equal to the Non-Compete Period (as defined below), he or she will not, directly or indirectly, engage in any activity, including development activity, whether as an employer, employee, consultant, director, investor, contractor, or otherwise, directly or indirectly, which is in competition with the casino, casino/hotel and/or casino/resort businesses conducted by the Company or any of its parents, subsidiaries or affiliates in the United States, Canada or Mexico or such other location that the Company or an affiliate of the Company conducts significant business operations (a) with respect to periods prior to the termination of Employee’s employment with the Company and its affiliates, at any time during Employee’s active employment period and (b) with respect to periods following the termination of Employee’s employment with the Company and its affiliates, at any time during the twelve months preceding the termination of Employee’s employment with the Company and its affiliates. Notwithstanding anything herein to the contrary, this Section 11.1 shall not prevent Employee from: (i) acquiring securities representing not more than 1% of the outstanding voting securities of any entity the securities of which are traded on a national securities exchange or in the over the counter market; or (ii) obtaining employment in the hotel/resort industry for an entity that does not engage in the casino business. Employee acknowledges that the restrictions described above are reasonable as to both time and geographic scope, as the Company competes for customers with all gaming establishments in these areas. For purposes of this Agreement, “ Non-Compete Period ” shall mean the following: (w) if the Employee has voluntarily terminated employment with the Company without Good Reason, the notice period under Section 9 (including for the avoidance of doubt, the six-month notice period in the event Employee is going to work or act in competition with the Company as described in Section 12 of this Agreement); (x) (1) if the Company has terminated Employee’s employment with the Company without Cause, (2) if Employee has terminated employment with the Company with Good Reason or (3) if the Company delivers to Employee a Notice of Non-Renewal in accordance with Section 1, the period during which the Company is obligated to pay Employee severance pursuant to Section 8.1, (y) if the Company has terminated Employee’s employment with the Company for Cause, six (6) months, or (z) if the Employee’s employment with the Company is terminated due to disability, the salary continuation period pursuant to Section 8.4. 11.1 If Employee breaches any of the covenants in Section 11.1, then the Company may terminate any of his or her rights under this Agreement, whereupon all of the Company’s obligations under this Agreement shall terminate without further obligation to him or her except for obligations that have been paid (except as otherwise provided in Section 11.6), accrued or are vested as of or prior to such termination date. In addition, the Company shall be entitled to seek to enforce any such covenants, including obtaining monetary damages, specific performance and injunctive relief. Employee’s Options and Option Shares will be treated in accordance with the terms of the Option Plan. 11.2 During the Employment Term (so long as Employee remains employed by the Company or its affiliates) and for a period of eighteen (18) months following the termination of Employee’s employment with the Company and its affiliates, Employee will not, directly or indirectly hire, induce, persuade or attempt to induce or persuade, any Salary Grade 10 or higher employee of the Company or its subsidiaries or affiliates, to leave or abandon employment with the Company, its subsidiaries or affiliates, for any reason whatsoever (other than Employee’s personal secretary and/or assistants). 11.3 During the Employment Term (so long as Employee remains employed by the Company or its affiliates) and for a period of eighteen (18) months following the termination of Employee’s employment with the Company and its affiliates, Employee will not communicate with employees, customers, or suppliers of the Company, or its subsidiaries or affiliates of the Company or any principals or employee thereof, or any person or organization in any manner whatsoever that is detrimental to the business interests of the Company, its subsidiaries or affiliates. Employee further agrees from the end of Employee’s full-time employment with the Company and its affiliates not to make statements to the press or general public with respect to the Company or its subsidiaries or affiliates that are detrimental to the Company, its subsidiaries, affiliates or employees without the express written prior authorization of the Company, and the Company agrees that it will not make statements to the press or general public with respect to Employee that are detrimental to him or her without the express written prior authorization of Employee. Notwithstanding the foregoing, Employee shall not be prohibited at the expiration of the non-competition period from pursuing his or her own business interests that may conflict with the interests of the Company. 11.4 Each of Employee and the Company intends and agrees that if, in any action before any court, agency or arbitration tribunal legally empowered to enforce the covenants in this Section 11, any term, restriction, covenant or promise contained herein is found to be unreasonable and, accordingly, unenforceable, then such term, restriction, covenant or promise shall be deemed modified to the extent necessary to make it enforceable by such court, agency or arbitration tribunal. 11.5 Should any court, agency or arbitral tribunal legally empowered to enforce the covenants contained in this Section 11 find that Employee has breached the terms, restrictions, covenants or promises herein in any material respect (except to the extent it has been modified to make it enforceable): (a) the Company will not be obligated to continue to pay Employee the salary or benefits provided for under the severance provisions contained in the Agreement (including all required benefits under benefit plans), and (b) Employee will reimburse the Company any severance benefits received after the date of termination as well as any reasonable costs and attorney fees necessary to secure such repayments. For the avoidance of doubt, the Company shall be entitled to money damages and/or injunctive relief due to Employee’s breach of the terms, restrictions, covenants or promises contained in this Section 11 without regard to whether or not such breach is material, it being understood that the limiting effect of the phrase “in any material respect” in the immediately preceding sentence shall operate solely with respect to the remedies available pursuant to this Section 11.6. 11.6 For the avoidance of doubt, for purposes of this Section 11, “Employee's employment” shall not include any period of salary continuation hereunder. 11.7 This Section and all of its provisions will survive Employee’s separation from employment for any reason. 12. Confidentiality . 12.1 Employee’s position with the Company will or has resulted in his or her exposure and access to confidential and proprietary information which he or she did not have access to prior to holding the position, which information is of great value to the Company and the disclosure of which by him or her, directly or indirectly, would be irreparably injurious and detrimental to the Company. During his or her term of employment and without limitation thereafter, Employee agrees to use his or her best efforts and to observe the utmost diligence to guard and protect all confidential or proprietary information relating to the Company from disclosure to third parties. Employee shall not at any time during and after the end of his or her full-time active employment, make available, either directly or indirectly, to any competitor or potential competitor of the Company or any of its subsidiaries, or their affiliates, or divulge, disclose, communicate to any firm, corporation or other business entity in any manner whatsoever, any confidential or proprietary information covered or contemplated by this Agreement, unless expressly authorized to do so by the Company in writing. Notwithstanding the above, Employee may provide such Confidential Information if ordered by a federal or state court, arbitrator or any governmental authority, pursuant to subpoena, or as necessary to secure legal and financial counsel from third party professionals or to enforce his or her rights under this Agreement. In such cases, Employee will use his or her reasonable best efforts to notify the Company, at least five (5) business days prior to providing such information, including the nature of the information required to be provided. 12.2 For the purpose of this Agreement, “ Confidential Information ” shall mean all information of the Company, its subsidiaries and affiliates relating to, or useful in connection with, the business of the Company, its subsidiaries and affiliates, whether or not a “trade secret” within the meaning of applicable law, which is not generally known to the general public and which has been or is from time to time disclosed to, or developed by, Employee as a result of his or her employment with the Company. Confidential Information includes, but is not limited to, the Company’s product development and marketing programs, data, future plans, formula, food and beverage procedures, recipes, finances, financial management systems, player identification systems (Total Rewards), pricing systems, client and customer lists, organizational charts, salary and benefit programs, training programs, computer software, business records, files, drawings, prints, prototyping models, letters, notes, notebooks, reports, and copies thereof, whether prepared by him, her or others, and any other information or documents which Employee is told or reasonably ought to know that the Company regards as confidential. 12.3 Employee agrees that upon separation from employment for any reason whatsoever, he or she shall promptly deliver to the Company all Confidential Information, including but not limited to documents, reports, correspondences, computer printouts, work papers, files, computer lists, telephone and address books, rolodex cards, computer tapes, disks, and any and all records in his or her possession (and all copies thereof) containing any such Confidential Information, and all items created in whole or in part by Employee within the scope of his or her employment even if the items do not contain Confidential Information. 12.4 Employee shall also be required to sign a non-disclosure or confidentiality agreement if Employee is not currently a party to such an agreement with the Company. Such agreement shall also remain in full force and effect, provided that , in the event of any conflict between any such agreement(s) and this Agreement, this Agreement shall control. The form of non-disclosure or confidentiality agreement is attached hereto as Exhibit C . 12.5 This Section and all of its provisions will survive Employee’s separation from employment for any reason. 13. Injunctive Relief . Employee acknowledges and agrees that the terms provided in Sections 11 and 12 are the minimum necessary to protect the Company, its affiliates and subsidiaries, and their successors and assigns, in the use and enjoyment of the Confidential Information and the good will of the business of the Company. Employee further agrees that damages cannot fully and adequately compensate the Company in the event of a breach or violation of the restrictive covenants set forth herein and that without limiting the right of the Company to pursue all other legal and equitable remedies available to it, the Company shall be entitled to seek injunctive relief, including but not limited to a temporary restraining order, preliminary injunction and permanent injunction, to prevent any such violations or any continuation of such violations for the protection of the Company. The granting of injunctive relief will not act as a waiver by the Company of its right to pursue any and all additional remedies. 14. Post Employment Cooperation . Employee agrees that upon separation for any reason from the Company, Employee will cooperate in assuring an orderly transition of all matters being handled by him or her. Upon the Company providing reasonable notice to him or her, he or she will also appear as a witness at the Company’s request and/or assist the Company in any litigation, bankruptcy or similar matter in which the Company or any affiliate thereof is a party or otherwise involved. The Company will defray any reasonable out-of-pocket expenses incurred by Employee in connection with any such appearance. In connection therewith, the Company agrees to indemnify Employee as prescribed in Article Tenth of the Certificate of Incorporation, as amended, of the Company. 15. Release . Upon the termination of Employee’s active full-time employment, and in consideration of and as a condition to the actual receipt of all compensation and benefits described in this Agreement (including without limitation any severance payments pursuant to this Agreement), except for claims arising from the covenants, agreements, and undertakings of the Company as set forth herein and except as prohibited by statutory language, Employee and the Company will enter into an agreement which forever and unconditionally waives and releases Caesars Entertainment Corporation, Caesars Entertainment Operating Company, Inc., their subsidiaries and affiliates, and their officers, directors, agents, benefit plan trustees, and employees from any and all claims, whether known or unknown, and regardless of type, cause or nature, including but not limited to claims arising under all salary, vacation, insurance, bonus, stock, and all other benefit plans, and all state and federal anti-discrimination, civil rights and human rights laws, ordinances and statutes, including Title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act, concerning Employee’s employment with Caesars Entertainment Corporation, Caesars Entertainment Operating Company, Inc., its subsidiaries and affiliates, the cessation of that employment and Employee’s service as a shareholder, employee, officer and director of the Company and its subsidiaries. The form of release is set forth in Exhibit B . 16. Assumption of Agreement on Merger, Consolidation or Sale of Assets . In the event the Company agrees to (a) enter into any merger or consolidation with another company in which the Company is not the surviving company or (b) sell or dispose of all or substantially all of its assets, and the company which is to survive fails to make a written agreement with Employee to either: (1) assume the Company’s financial obligations to Employee under this Agreement or (2) make such other provision for Employee as is reasonably satisfactory to Employee, then Employee shall have the right to resign for Good Reason as defined under this Agreement. 17. Assurances on Liquidation . The Company agrees that until the termination of this Agreement as above provided, it will not voluntarily liquidate or dissolve without first making a full settlement or, at the discretion of Employee, a written agreement with Employee satisfactory to and approved by him or her in writing, in fulfillment of or in lieu of its obligations to him or her under this Agreement. 18. Amendments; Entire Agreement . This Agreement may not be amended or modified orally, and no provision hereof may be waived, except in a writing signed by the parties hereto. This Agreement and the Option Plan contain the entire agreement between the parties concerning the subject matter hereof and supersede all prior agreements and understandings, written and oral, between the parties with respect to the subject matter of this Agreement and the Option Plan, including without limitation the Prior Employment Agreement. 19. Assignment . 19.1 Except as otherwise provided in Section 19.2, this Agreement cannot be assigned by either party hereto, except with the written consent of the other. Any assignment of this Agreement by either party shall not relieve such party of its or his or her obligations hereunder. 19.2 The Company may elect to perform any or all of its obligations under this Agreement through a subsidiary or affiliate, and if the Company so elects, Employee will be an employee of such subsidiary or affiliate. Notwithstanding any such election, the Company’s obligations to Employee under this Agreement will continue in full force and effect as obligations of the Company, and the Company shall retain primary liability for their performance. 20. Binding Effect . This Agreement shall be binding upon and inure to the benefit of the personal representatives and successors in interest of the Company. 21. Governing Law . This Agreement shall be governed by the laws of the State of Nevada as to all matters, including but not limited to matters of validity, construction, effect and performance. 22. Jurisdiction . Any judicial proceeding seeking to enforce any provision of, or based on any right arising out of, this Agreement or any agreement identified herein may be brought only in state or federal courts of the State of Nevada, and by the execution and delivery of this Agreement, each of the parties hereto accepts for themselves the exclusive jurisdiction of the aforesaid courts and irrevocably consents to the jurisdiction of such courts (and the appropriate appellate courts) in any such proceedings, waives any objection to venue laid therein and agrees to be bound by the judgment rendered thereby in connection with this Agreement or any agreement identified herein. 23. Notices . Any notice to be given hereunder by either party to the other may be effected by personal delivery, in writing, or by mail, registered or certified, postage prepaid with return receipt requested. Mailed notices shall be addressed to the parties at the addresses set forth below, but each party may change his, her or its address by written notice in accordance with this Section 23. Notices shall be deemed communicated as of the actual receipt or refusal of receipt. If to Employee: ________________________________ ________________________________ 24. Construction . This Agreement is to be construed as a whole, according to its fair meaning, and not strictly for or against any of the parties. If to Company: Caesars Entertainment Operating Company, Inc. One Caesars Palace Drive Las Vegas, NV 89109 Attn: General Counsel 25. Severability . If any provision of this Agreement shall be determined by a court to be invalid or unenforceable, the remaining provisions of this Agreement shall not be affected thereby, shall remain in full force and effect, and shall be enforceable to the fullest extent permitted by applicable law. 26. Withholding Taxes . Any payments or benefits to be made or provided to Employee pursuant to this Agreement shall be subject to any withholding tax (including social security contributions and federal income taxes) as shall be required by federal, state, and local withholding tax laws. 27. Counterparts . This Agreement may be executed by the parties in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same agreement. IN WITNESS WHEREOF, Employee has hereunto set his or her hand and the Company has caused this Agreement to be executed in its name and on its behalf and its corporate seal to be hereunto affixed and attested by its corporate officers thereunto duly authorized. /s/ Diane Wilfong Employee Caesars Entertainment Operating Company, Inc. By: /s/ Mary Thomas Name: Mary Thomas Its: ____ EVP HR _____________________________________ Exhibit A • Medical Insurance (including health, dental and vision) • Life Accident Insurance • Accrued benefits under Savings and retirement plan • D&O Insurance • Financial Counseling (in accordance with Company policy, maximum benefit is funds allocated as of Separation Date – no new funds) Exhibit B GENERAL RELEASE THIS GENERAL RELEASE (the “ Release ”) is entered into between Caesars Entertainment Operating Company, Inc. (the “ Company ”) and Diane Wilfong (the “ Employee ”) as of the _____ day of ________________, _______. The Company and the Employee agree as follows: 1. Employment Status . The Employee’s employment with the Company shall terminate effective as of __________________, ________________ (the “ Separation Date ”). 2. Payment and Benefits . Upon the effectiveness of the terms set forth herein, the Company shall provide the Employee with all of the applicable payments and benefits set forth in the Employment Agreement between the Company and the Employee, dated as of ______, ______ (as amended from time to time, the “ Employment Agreement ”). 3. No Liability . This Release does not constitute an admission by the Company, or any of its subsidiaries, affiliates, divisions, trustees, officers, directors, partners, agents, or employees, or by the Employee, of any unlawful acts or of any violation of federal, state or local laws. 4. Release . In consideration of the payments and benefits set forth in Section 8.1 (Termination Without Cause; Resignation for Good Reason; Company Failure to Renew) of the Employment Agreement, the Employee for himself, his heirs, administrators, representatives, executors, successors and assigns (collectively, “ Employee Releasors ”) does hereby irrevocably and unconditionally release, acquit and forever discharge the Company and each of its subsidiaries, affiliates, divisions, successors, assigns, trustees, officers, directors, partners, agents, and former and current employees, including without limitation all persons acting by, through, under or in concert with any of them, including without limitation the Sponsors (as defined in the Management Investor Rights Agreement, dated as of January 28, 2008, as amended, among the Company, Employee and the other parties specified therein) (collectively, “ Company Releasees ”), and each of them from any and all charges, complaints, claims, liabilities, obligations, promises, agreements, controversies, damages, remedies, actions, causes of action, suits, rights, demands, costs, losses, debts and expenses (including attorneys’ fees and costs) of any nature whatsoever, known or unknown, whether in law or equity and whether arising under federal, state or local law and in particular including any claim for discrimination based upon race, color, ethnicity, sex, national origin, religion, disability age (including without limitation under the Age Discrimination in Employment Act of 1967 as amended by the Older Workers Benefit Protection Act (“ ADEA ”), Title VII of the Civil Rights Act of 1964 as amended by the Civil Rights Act of 1991, the Equal Pay Act of 1962, and the Americans with Disabilities Act of 1990) or any other unlawful criterion or circumstance, which Employee Releasors had, now have, or may have or claim to have in the future against each or any of the Company Releasees by reason of any matter, cause or thing occurring, done or omitted to be done from the beginning of the world until the date of the execution of this Release; provided , however , that nothing herein shall release (i) any obligation of Company under Section 8 (Termination of Employment), Section 18 (Amendments; Entire Agreement) or Section 22 (Jurisdiction) of the Employment Agreement or (ii) any right of indemnification or to director and officer liability insurance coverage under any of the company’s organizational documents or at law under any plan or agreement and applicable to the Employee. In addition, nothing in this Release is intended to interfere with the Employee’s right to file a charge with the Equal Employment Opportunity Commission in connection with any claim the Employee believes he may have against the Company Releasees. However, by executing this Release, the Employee hereby waives the right to recover in any proceeding that the Employee may bring before the Equal Employment Opportunity Commission or any state human rights commission or in any proceeding brought by the Equal Employment Opportunity Commission or any state human rights commission on the Employee’s behalf. In addition, this release is not intended to interfere with the Employee’s right to challenge that his waiver of any and all ADEA claims pursuant to this Release is a knowing and voluntary waiver, notwithstanding the Employee’s specific representation to the Company that he has entered into this Agreement knowingly and voluntarily. As of the Separation Date, Employee acknowledges and represents that Employee has not been either directly or indirectly involved in, witnessed or asked or directed to participate in any conduct that could give rise to an allegation that the Company or any of its subsidiaries or affiliates has violated any laws applicable to its businesses or that could otherwise be construed as inappropriate or unethical in any way, even if such conduct is not, or does not appear to be, a violation of any law. Employee confirms that Employee has been given the opportunity to report such conduct to the Company and to third parties and that Employee has not made such report. Employee also confirms that Employee has no charge, complaint or action against the Company or any Company Releasees in any forum or form. 5. Bar . The Employee acknowledges and agrees that if he should hereafter make any claim or demand or commence or threaten to commence any action, claim or proceeding against the Company Releasees with respect to any cause, matter or thing which is the subject of the release under Paragraph 4 of this Release (other than a claim brought under ADEA), this Release may be raised as a complete bar to any such action, claim or proceeding, and the applicable Company Releasee may recover from the Employee all costs incurred in connection with such action, claim or proceeding, including attorneys’ fees. 6. Restrictive Covenants . The Employee acknowledges that the provisions of Section 11 (Non-Competition Agreement) through Section 14 (Post Employment Cooperation), inclusive, of the Employment Agreement shall continue to apply pursuant to their terms. 7. Governing Law . This Release shall be governed by and construed in accordance with the laws of the State of Nevada, without regard to conflicts of laws principles. 8. Acknowledgment . The parties hereto have read this Release, understand it, and voluntarily accept its terms, and the Employee acknowledges that he has been advised by Company to seek the advice of legal counsel before entering into this Release, and has been provided with a period of twenty-one (21) days in which to consider entering into this Release. 9. Revocation . The Employee has a period of seven (7) days following the execution of this Release during which the Employee may revoke this Release, and this Release shall not become effective or enforceable until such revocation period has expired. If, within the ten (10) day period following such expiration, Company fails to execute this Release, then this Release shall become null and void and have no force or effect. 10. Counterparts . This Release may be executed by the parties hereto in counterparts, which taken together shall be deemed one original. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] IN WITNESS WHEREOF, Employee has hereunto set his or her hand and the Company has caused this Release to be executed in its name and on its behalf and its corporate seal to be hereunto affixed and attested by its corporate officers thereunto duly authorized. Employee Caesars Entertainment Operating Company, Inc. By: Name: Its: ____________________________________________________ Exhibit C EMPLOYEE'S AGREEMENT (CONCERNING PROTECTED AND CONFIDENTIAL COMPANY INFORMATION AND MATERIALS) In consideration of, and as a condition precedent to, my employment and/or continued employment, with Caesars Entertainment Operating Company, Inc., or one of its direct or indirect subsidiaries (hereinafter referred to jointly as the "Company"), and for other good and valuable consideration, including but not limited to any future, additional compensation, bonus, stock options, 401(k) matching contributions and other benefits, I hereby specifically agree as follows: 1. I recognize that the Company is engaged in the business of developing, owning and/or managing casinos and related hotels, as well as other gaming related activity. I understand that the Company has developed and is the owner of certain commercially valuable technical and non-technical information, which is not public knowledge, which is a valuable asset essential to and used in the business of the Company. A non-exhaustive list of examples of such Confidential Information is: computer programs including software related documentation, source codes, object codes, technical plans, processes, methods, practices, algorithms and the reports derived from such processes, manuals and databases; internal financial data; marketing programs, strategies and campaigns; internal manuals; new product development plans and ideas; lists of customers, including those lists obtained and maintained by the Company during my employment; and designs, blueprints, architectural plans and engineering data. I acknowledge that the Confidential Information is proprietary to the Company and that, as such, some of the information, including but not limited to that involving computer programs, is treated as a trade secret by the Company and is also protected by certain copyright laws. I recognize and agree that the Company is engaged in a highly competitive industry and that the maintenance of the secret nature of this information is essential to preserving its value to the Company; that disclosure of any of this information would be detrimental to and cause substantial harm to the Company; and that as I have or may have access to or be informed of such information during the course of my employment, that I am obligated to and will safeguard all such information during my employment with the Company. I further agree that I will not duplicate, reverse engineer, alter, replicate or modify the Confidential Information or any part of the Confidential Information made available to me nor disclose to any third party any Confidential Information. 2. In addition to the information developed and owned by the Company that is confidential, I also understand that certain information received from third parties is also confidential and proprietary. Third parties may include, but not be limited to, any and all tribal entities, business enterprises, or other organizations or individuals who have relationships with the Company. To this end, any information received by me from third parties during any furtherance of my obligations as an employee of the Company which concerns the personal, financial, or other affairs of the third party will be treated in full confidence and will not be revealed to any other persons, firms, or organizations and shall be governed by this Agreement in the same manner as the Company’s confidential and proprietary information. 3. I agree that any work, invention, innovation, idea or report that I produce in connection with my work for the Company, or which results from or is suggested by the work I do for or on behalf of the Company is a "work for hire", and will be the sole property of the Company. (Such work, inventions, innovations, ideas, and reports are referred to as the "Work".) The foregoing applies whether or not the Work was conceived or performed during Company hours or on Company equipment. I agree that I will execute all necessary documents or take other actions necessary to assist the Company in obtaining patents, copyrights or other legal protection of the Work for the Company's benefit (although the Work will be the exclusive property of the Company whether or not patented or copyrighted). 4. I will not at any time, directly or indirectly, either during my employment or for two years thereafter, disclose to any person, corporation or other entity which offers any product or service which is, in any way, in competition with any product or service offered by the Company, or use in competition with the Company, any of the Company's confidential or proprietary information, except on behalf of the Company, without first obtaining the Company's written consent thereto, which consent can be given only by a duly authorized officer of the Company. 5. Upon the termination of my employment for any reason whatsoever, I will promptly deliver to the Company all documents, computer software, files, databases, drawings, prints, prototypes, models, manuals, letters, lists, notes, notebooks, reports and copies thereof, whether prepared by me or others, all other material of a secret, confidential or proprietary nature relating to the Company's business, and any other document relating or referring to such material. 6. If I am or become an employee of the Company in Salary Grade 10 or above (manager or above), I recognize that both I and all others in Salary Grade 10 or above (manager or above) are key employees of the Company who have special and unique knowledge of the Company's operations and personnel and who, as a result of those and other factors, occupy positions of trust and responsibility which bring with them a special duty of care and loyalty to the Company. I recognize that the Company has substantial good will in the casino gaming industry which reaches beyond the Company location at which I am currently employed. I also recognize that the Company has spent substantial time and has incurred substantial expense in maintaining and creating customer good will among its manager-level employees; that the training, experience, skills and unique knowledge of the Company's operation are an integral part of, and are necessary for, an efficient, profitable operation; and that, therefore, the Company has a protectable business interest in maintaining these employees. I understand that my solicitation of any manager-level employee, with whom I have had a reporting relationship (up or down) or other direct contact or association while employed by the Company or thereafter, for employment at a casino and/or related hotel which competes with the Company in the gaming business would cause detrimental and irreparable harm to the Company. Accordingly, neither during my employment with the Company nor for eighteen (18) months following the cessation of that employment will I either directly or indirectly induce, persuade, solicit, or attempt to induce or persuade any Company employee in Salary Grade 10 or above (manager or above) as described above in this paragraph to leave or abandon his/her employment with the Company for employment at a casino and/or related hotel which competes with the Company in the gaming business. I understand that such inducement, persuasion and/or solicitation includes, but is not limited to, recommending that the manager-level employee contact any person affiliated with a competitor of the Company in the gaming business. 7. I understand and agree that a breach by me of any of the obligations set forth above will cause the Company to suffer irreparable harm. Accordingly, I understand and agree that if I breach any of my obligations set forth above, the Company has the right to petition a court for, and to obtain therefrom, an injunction enjoining me from breaching any such obligations. I further understand and agree that, to the extent that they can be proven by the Company, I will be liable for such monetary damages as a result from any breach by me of my obligations set forth above prior to such breach being enjoined by the Company. 8. The Company's rights and my obligations created by this Agreement are intended to be in addition to, and not in limitation of, any obligation I may have, or right the Company may have, under otherwise applicable law. This Agreement replaces any prior "Employee's Agreement (Concerning Protected and Confidential Information and Materials)." Also, this Agreement and the obligations referred to herein are separate from and in addition to any other obligations I may have to the Company. I understand that I have an affirmative obligation to advise any future employer of mine of the existence of this Agreement and to provide said employer with a copy of the Agreement; and that the Company may also advise and provide any future employer a copy of this Agreement. I specifically acknowledge that both my obligations and the Company's remedies hereunder are fair and reasonable. 9. If any provision of this Agreement is held to be unenforceable, I understand and agree that such unenforceability shall not affect any other provision hereof and that the remainder of the Agreement shall be enforceable. I also agree that the Company may assign its rights under this Agreement to any parent, subsidiary, or affiliate or to any successor entity that becomes my employer through any merger, spin-off, reorganization or restructuring. 10. I agree that this Agreement shall be governed by and construed under the laws of the State of Nevada (where employed), and I hereby consent to the jurisdiction of the courts of the State of Nevada (where employed) in any action brought by the Company to enforce this Agreement. I further agree that I will pay all costs and expenses, including reasonable attorneys fees, incurred by the Company in enforcing any of my obligations under this Agreement. [Signature Page Follows] COMPANY EMPLOYEE Mary Thomas Printed: Diane Wilfong By: /s/ Mary Thomas Signed: /s/ Diane Wilfong Date: 3-12-2013 Date: 8/8/2012 ACKNOWLEDGEMENT The undersigned hereby acknowledges that he/she has received, read and understands the Caesars Entertainment Operating Company, Inc., or one of its direct or indirect subsidiaries, Employee’s Agreement (Concerning Protected and Confidential Company Information and Materials). ___ /s/Diane Wilfong ___________ Signature __ Diane Wilfong _____________ Printed Name Date: ____ 8/8/2012 ___________ Exhibit 10.87 EMPLOYMENT AGREEMENT THIS AGREEMENT, made as of April 2, 2009 (the “ Effective Date ”) between Harrah’s Operating Company, Inc., with offices at One Caesars Palace Drive, Las Vegas, Nevada (the “ Company ”), and Timothy R. Donovan (“ Executive ”). The Company and Executive agree as follows: 1. Introductory Statement . The Company desires to secure the services of Executive effective on the Effective Date. This Agreement supersedes any employment agreement or offer letter between the Company and Executive (the “ Prior Employment Agreement ”). The Company hereby agrees to employ Executive, and Executive hereby agrees to be employed by the Company, subject to the terms and conditions of this Agreement, for a period beginning on the Effective Date and ending on the fourth anniversary thereof (the “ Initial Term ”); provided that, on the fourth anniversary of the Effective Date and each anniversary of the Effective Date thereafter, the employment period shall be extended by one year unless, at least sixty (60) days prior to such anniversary, the Company or Executive delivers a written notice (a “ Notice of Non-Renewal ”) to the other party that the employment period shall not be so extended (the Initial Term as from time to time extended or renewed, the “ Employment Term ”). 2. Agreement of Employment . Effective as of the Effective Date, the Company agrees to, and hereby does, employ Executive, and Executive agrees to, and hereby does, accept continued employment by the Company, in a full-time capacity as Senior Vice President and General Counsel pursuant to the provisions of this Agreement and of the bylaws of the Company, and subject to the control of the individual or individuals to whom Executive reports and the Board of Directors (the “ Board ”). 3. Executive’s Obligations . During the period of his or her service under this Agreement, Executive shall devote substantially all of his or her time and energy during business hours to the benefit of the Company's business; provided , however , that Executive may serve on the board of directors (1) for a charitable organization and (2) of any other company or organization upon prior approval by the Board or the Chief Executive Officer of the Company. Executive agrees to serve the Company diligently and to the best of his or her ability, and to follow the policies and directions of the Company. Executive represents and warrants that he or she is not subject to any employment, severance, non-competition or other similar arrangement, and Executive agrees and covenants that the execution of this Agreement by Executive does not violate, conflict with, result in a breach or require any consent, waiver or approval any contract, arrangement or other agreement that Executive is a party to or by which Executive is bound by. 4. Compensation . 4.1 Base Salary . As compensation for all services performed by Executive under and during the Employment Term, the Company shall pay to Executive a base salary at the rate of $700,000 per year, in equal bi-weekly installments in accordance with its customary payroll practices. The Human Resources Committee of the Board or any successor committee responsible for setting compensation levels for executives (the “ Committee ”) shall, in good faith, review the salary of Executive, on an annual basis, with a view to consideration of appropriate merit increases (but not decreases) in such salary. Such base salary, as may be increased from time to time, is hereafter referred to as the “ Base Salary .” All payments will be subject to Executive’s chosen benefit deductions and the deductions of payroll taxes and similar assessments as required by law. 4.2 Bonus . Executive will participate in the Company’s annual incentive bonus program(s) applicable to Executive’s position, in accordance with the terms of such program(s), and shall have the opportunity to earn an annual bonus thereunder based on the achievement of performance objectives determined by the Board. If Executive dies or resigns pursuant to this Agreement or pursuant to any other agreement between the Company and Executive providing for such resignation during the period of this Agreement, service for any part of the month in which any such event occurs shall be considered service for the entire month. 5. Equity Award . Executive is eligible for the grant of options (the “ Options ”) to purchase shares of non-voting common stock of the Company (the “ Option Shares ”) pursuant to the Harrah’s Entertainment, Inc. Management Equity Incentive Plan dated as of February 27, 2008 (the “ Option Plan ”). All grants of Options, if any, is subject to the review and approval of the Board or the Human Resources Committee of the Board, and Executive acknowledges and agrees that Executive has no right to the grant of any Options. 6. Benefits . During the Employment Term, except as otherwise provided herein, Executive shall be entitled to participate in any and all incentive compensation and bonus arrangements maintained by the Company for its similarly-situated executives and to receive benefits and perquisites at least as favorable to Executive as those presently provided to Executive by the Company. 6.1 Health Insurance . Executive will receive the regular group health plan coverage(s) provided to similarly situated officers, which coverage(s) may be subject to generally applicable changes during the Employment Term, provided that such changes are generally applicable to similarly situated officers. Executive will be required to contribute to the cost of the basic plan in the same manner as other similarly situated officers. 6.2 Long Term Disability Benefits . Executive will be eligible to receive long term disability coverage paid by the Company in accordance with the terms of the Company’s policies. 6.3 Life Insurance . Executive will receive life insurance paid by the Company in accordance with the terms of the Company’s policies as in effect from time to time, which policies may be subject to changes during the Employment Term, provided that such changes are generally applicable to similarly situated officers. 6.4 Retirement Plan . Executive will also be eligible during the Employment Term to participate in the Company’s 401(k) Plan, as may be modified or changed. In addition, Executive will also be eligible during the Employment Term to participate in the Company’s deferred compensation plan, as may be modified or changed from time to time, in the same manner as other similarly situated officers of the Company. 6.5 Financial Counseling . During the Employment Term, Executive will also receive financial counseling in accordance with the terms of the Company’s policies as in effect from time to time, which policies may be subject to changes during the Employment Term, provided that such changes are generally applicable to similarly situated officers. 6.6 Vacation . Executive will be entitled to paid vacation in accordance with the terms of the Company’s policies. 6.7 Reimbursement of Expenses . The Company shall pay, or will reimburse Executive for, reasonable business expenses incurred in the performance of Executive’s duties hereunder in accordance with Company policy. 6.8 D&O Insurance . The Company shall provide Executive with Director’s and Officer’s indemnification insurance coverage, in amount and scope that is customary for a company of the Company’s size and nature, in accordance with the terms of the Company’s policies as in effect from time to time, which policies may be subject to changes during the Employment Term, provided that such changes are generally applicable to similarly situated officers. 6.9 Reimbursements; In-Kind Benefits . To the extent that any amount eligible for reimbursement or any in-kind benefit provided under this Agreement is deferred compensation subject to the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”), the following rules shall apply: (a) Payment of such reimbursements shall be made no later than the end of Executive’s taxable year following the taxable year in which the expense is incurred; (b) All such amounts eligible for reimbursement or any in-kind benefit provided under this Agreement in one taxable year shall not affect the amount eligible for reimbursement or in-kind benefits to be provided in any other taxable year; and (c) The right to any such reimbursement or in-kind benefit hereunder shall not be subject to liquidation or exchange for any other benefit. The parties intend that all reimbursements or in-kind benefits provided for hereunder will be made in a manner that makes such reimbursements and in-kind benefits consistent with or exempt from Section 409A of the Code. 7. Reserved 8. Reserved . 9. Termination of Employment . The following provisions shall govern Executive’s rights to severance benefits (if any) upon a termination of his or her employment. 9.1 Termination Without Cause; Resignation for Good Reason; Company Failure to Renew. (a) The Board reserves the right to terminate the Employment Term and Executive from his or her then current position without Cause (as defined in Section 11.1 herein) at any time. Executive reserves the right to terminate the Employment Term and resign from his or her position for Good Reason (as defined in Section 11.2 herein) by giving the Company thirty (30) days written notice which states the basis for such Good Reason. (b) Upon (x) the Company’s termination of Executive’s employment without Cause, (y) a termination of Executive’s employment due to the Company’s delivery to Executive of a Notice of Non-Renewal in accordance with Section 1 hereof (it being understood and agreed that (1) the Company’s obligations pursuant to this Section 9.1(b)(y) shall survive until fully discharged, notwithstanding the conclusion or expiration of the Employment Term and (2) for purposes of the Management Investor Rights Agreement, dated as of January 28, 2008, among Harrah’s Entertainment, Inc. and the other parties thereto, the termination of Executive’s employment with the Company due to the Company’s delivery to Executive of a Notice of Non-Renewal in accordance with Section 1 shall be treated as a termination of Executive’s employment without Cause) or (z) Executive’s resignation from his or her position for Good Reason as described in Section 9.1(a) above: (i) The Company shall pay Executive, within thirty (30) days following his or her termination of employment, Executive’s accrued but unused vacation, unreimbursed business expenses and Base Salary through the date of termination (to the extent not theretofore paid) (the “ Accrued Benefits ”); (ii) Subject to Executive executing and not revoking the release attached hereto as Exhibit B , the Company will pay Executive: (A) in approximately equal installments during the eighteen (18) month period following such termination (the “ Severance Period ”), a cash severance payment in an amount equal to 1.5 multiplied by his or her Base Salary as in effect on the date of termination (the “ Severance Payment ”) and (B) at the time it pays annual bonuses to its similarly situated active officers, a pro rated bonus for the year in which the termination of employment occurs if (x) as of the date of termination of employment, Executive has been employed with the Company for more than six (6) months, (y) the separation occurs after June 30 of the year in which the termination of employment occurs and (z) Executive is eligible to receive such bonus on the basis of actual performance in accordance with the terms of the applicable bonus plan. If applicable, Executive will be entitled to receive the benefits set forth on Exhibit A hereto during the Severance Period. Subject to the following sentence, the installments of the Severance Payment will be paid to Executive in accordance with the Company’s customary payroll practices, and will commence on the first payroll date following the termination of Executive’s employment. Notwithstanding the foregoing, if, as of the date of termination, Executive is a “specified employee” as defined in subsection (a)(2)(B)(i) of Section 409A of the Code (“ Specified Employee ”), installments of the Severance Payments will not commence, and payment of the pro rated bonus (if any) will not be made, until the first business day after the date that is six months following Executive’s “separation from service” within the meaning of subsection (a)(2)(A)(i) of Section 409A of the Code (the “ Delayed Payment Date ”) and, on the Delayed Payment Date, the Company will pay to Executive a lump sum equal to all amounts that would have been paid during the period of the delay if the delay were not required plus interest on such amount at a rate equal to the short-term applicable federal rate then in effect, and will thereafter continue to pay Executive the Severance Payment in installments in accordance with this Section; and (iii) Executive’s Options and Option Shares will be treated in accordance with the terms of the New Option Plan. (c) Except as otherwise provided in this Agreement, and except for any vested benefits under any tax qualified pension plans of the Company and vested deferred compensation under any applicable deferred compensation plans, and continuation of health insurance benefits on the terms and to the extent required by Section 4980B of the Code and Section 601 of the Employee Retirement Income Security Act of 1974, as amended (which provisions are commonly known as “ COBRA ”), neither the Company nor Executive shall have any additional obligations under this Agreement. 9.2 Termination for Cause or Resignation Without Good Reason. (a) The Company will have the right to terminate the Employment Term and Executive’s employment with the Company at any time from his or her then-current positions for Cause (as defined in Section 11.1 herein). A resignation by Executive without Good Reason shall not be a breach of this Agreement. (b) If the Employment Term and Executive’s employment are terminated for Cause, or if he or she resigns from his or her position without Good Reason, then: (i) Executive’s employment shall be deemed terminated on the date of such termination or resignation; (ii) Executive shall be entitled to receive all Accrued Benefits from the Company within thirty (30) days following such termination; and (iii) his or her rights with respect to his or her Options and Option Shares will be as set forth in the New Option Plan. (c) Except as otherwise provided in this Agreement, and except for any vested benefits under any tax qualified pension plans of the Company and vested deferred compensation under any applicable deferred compensation plans, and continuation of health insurance benefits on the terms and to the extent required by COBRA, neither the Company nor Executive shall have any additional obligations under this Agreement. 9.3 Death. (a) In the event that the Employment Term and Executive’s employment are terminated due to his or her death, (i) Executive’s right to receive his or her Base Salary and benefits under this Agreement (other than the Accrued Benefits) will terminate, and his or her estate and beneficiary(ies) will receive the benefits they are entitled to receive under the terms of the Company’s benefit plans and programs by reason of a participant’s death during active employment, (ii) Executive’s estate shall be entitled to receive all Accrued Benefits from the Company within thirty (30) days following such termination and (iii) Executive’s Options and Option Shares will be treated in accordance with the terms of the New Option Plan. For the avoidance of doubt, Executive’s estate shall be an express third party beneficiary of this provision, with the right to enforce the provision for and on behalf of Executive’s beneficiary(ies). (b) If Executive dies at a time when the Company owes Executive any Severance Payment(s) pursuant to Section 9.1(b), the Company shall pay such remaining Severance Payment(s) in a lump sum to Executive’s estate. (c) Except as otherwise provided in this Agreement, and except for any vested benefits under any tax qualified pension plans of the Company and vested deferred compensation under any applicable deferred compensation plans, and continuation of health insurance benefits on the terms and to the extent required by COBRA, neither the Company nor Executive shall have any additional obligations under this Agreement. 9.4 Disability. (a) If the Employment Term and Executive’s employment are terminated by reason of Executive’s disability (as defined below), he or she will be entitled to apply, at his or her option, for the Company’s long-term disability benefits and, if he or she is accepted for such benefits, then Executive’s Options and Option Shares will be treated in accordance with the terms of the New Option Plan, and the terms and provisions of the Company’s benefit plans and programs that are applicable in the event of such disability of an employee shall apply in lieu of the salary and benefits under this Agreement, except that: (i) Executive will be paid his or her Accrued Benefits within thirty (30) days of termination; (ii) Executive will receive eighteen (18) months of Base Salary continuation (the “ Salary Continuation Payment ”), offset by any long term disability benefits to which he or she is entitled during such period of salary continuation. In addition to payment of his or her Base Salary, Executive will be entitled to all benefits during the salary continuation period. Notwithstanding the foregoing, if, as of the date of termination pursuant to this Section 9.4, Executive is a Specified Employee, installments of the Salary Continuation Payment will not commence until the Delayed Payment Date and, on the Delayed Payment Date, the Company will pay to Executive a lump sum equal to all amounts that would have been paid during the period of the delay if the delay were not required plus interest on such amount at a rate equal to the short-term applicable federal rate then in effect, and will thereafter continue to pay Executive the Salary Continuation Payment in installments in accordance with this Section (b) If Executive is disabled so that he or she cannot perform his or her duties, then the Company may terminate his or her duties under this Agreement after giving Executive thirty (30) days’ notice of such termination (during which period Executive shall not have returned to full time performance of his or her duties). For purposes of this Agreement, disability will be the inability of Executive, with or without a reasonable accommodation, to perform the essential functions of his or her job for one hundred and eighty (180) days during any three hundred and sixty five (365) consecutive calendar day period as reasonably determined by the Committee (excluding Executive) based on independent medical advice from a physician who has examined Executive (such physician to be selected by the Company and reasonably acceptable to Executive). (c) Except as otherwise provided in this Agreement, and except for any vested benefits under any tax qualified pension plans of the Company and vested deferred compensation under any applicable deferred compensation plans, and continuation of health insurance benefits on the terms and to the extent required by COBRA, neither the Company nor Executive shall have any additional obligations under this Agreement. 10. Voluntary Termination Notice Period. Executive may terminate this Agreement at any time for any or no reason during its term upon thirty (30) days’ prior written notice to the Company, except as specified in this Section. If Executive is going to work or act in competition with the Company or its affiliates as described in Section 12 of this Agreement, Executive must give the Company six (6) months’ prior written notice of his or her intention to do so. The written notice provided by Executive shall specify the last day to be worked by Executive (the “ Separation Date ”), which Separation Date must be at least thirty (30) days or up to six (6) months (as appropriate) after the date the notice is received by the Company (it being understood that Executive shall not work or act in competition with the Company or its affiliates as described in Section 12 of this Agreement for the six (6) month period following delivery of the written notice referenced in the immediately preceding sentence without the prior written consent of the Company). Unless otherwise specified herein, or in a writing executed by both parties, Executive shall not receive any of the benefits provided in this Agreement after the Separation Date except for applicable rights and benefits that apply to employees generally after their termination of employment. 11. Definitions of Cause and Good Reason . 11.1 (23) For purposes of this Agreement, “ Cause ” shall mean: (i) The willful failure of Executive to substantially perform Executive’s duties with the Company (as described in Section 2 and Section 3) or to follow a lawful, reasonable directive from the Board or the chief executive officer of the Company (“ CEO ”) or such other executive officer to whom Executive reports (other than any such failure resulting from incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to Executive by the Board (or the CEO, as applicable) which specifically identifies the manner in which the Board (or the CEO, as applicable) believes that Executive has willfully not substantially performed Executive's duties or has willfully failed to follow a lawful, reasonable directive; (ii) (A) Any willful act of fraud, or embezzlement or theft, by Executive, in each case, in connection with Executive’s duties hereunder or in the course of Executive’s employment hereunder or (B) Executive’s admission in any court, or conviction of, or plea of nolo contendere to, a felony; (iii) Executive being found unsuitable for or having a gaming license denied or revoked by the gaming regulatory authorities in any jurisdiction in which the Company, Harrah’s Entertainment, Inc. or any of their respective subsidiaries or affiliates conducts gaming operations; (iv) (A) Executive’s willful and material violation of, or noncompliance with, any securities laws or stock exchange listing rules, including, without limitation, the Sarbanes-Oxley Act of 2002, provided that such violation or noncompliance resulted in material economic harm to the Company, or (B) a final judicial order or determination prohibiting Executive from service as an officer pursuant to the Securities and Exchange Act of 1934 or the rules of the New York Stock Exchange; or (v) A willful breach by Executive of Section 12 or Section 13 of this Agreement. (d) For purposes of this Section 11, no act or failure to act on the part of Executive, shall be considered “willful” unless it is done, or omitted to be done, by Executive in bad faith and without reasonable belief that Executive’s action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by Executive in good faith and in the best interests of the Company. The cessation of employment of Executive shall not be deemed to be for Cause unless and until Executive has been provided with written notice of the claim(s) against him or her under the above provision(s) and a reasonable opportunity (not to exceed thirty (30) days) to cure, if possible, and to contest said claim(s) before the Board. 11.2 For purposes of this Agreement, “ Good Reason ” shall mean, without Executive’s express written consent, the occurrence of any of the following circumstances unless such circumstances are fully corrected prior to the date of termination specified in the written notice given by Executive notifying the Company of his or her intention to terminate his or her Employment for Good Reason: (d) A reduction by the Company in Executive’s annual Base Salary, as the same may be increased from time to time pursuant to Section 4.1 hereof, other than a reduction in base salary that applies to a similarly situated class of employees of the Company or its affiliates; (e) Any material diminution in the duties or responsibilities of Executive as of the date hereof; provided that a change in control of the Company that results in the Company becoming part of a larger organization will not, in and of itself and unaccompanied by any material diminution in the duties or responsibilities of Executive, constitute Good Reason; (f) (i) The failure by the Company to pay or provide to Executive any material portion of his or her then current Base Salary or then current benefits hereunder (except pursuant to a compensation deferral elected by Executive) or (ii) the failure to pay Executive any material portion of deferred compensation under any deferred compensation program of the Company within thirty (30) days of the date such compensation is due and permitted to be paid under Section 409A of the Code, in each case other than any such failure that results from a modification to any compensation arrangement or benefit plan that is generally applicable to similarly situated officers; (g) The Company’s requiring Executive to be based anywhere other than Las Vegas, Nevada (except for required travel on the Company’s business to an extent substantially consistent with Executive’s present business travel obligations); or (h) The Company’s failure to obtain a satisfactory agreement from any successor to assume and agree to perform this Agreement, as contemplated in Section 17 hereof. 12. Non-Competition Agreement . 12.1 During the Employment Term (so long as Executive remains employed by the Company or its affiliates) and for a period following the termination of Executive’s employment with the Company and its affiliates equal to the Non-Compete Period (as defined below), he or she will not, directly or indirectly, engage in any activity, including development activity, whether as an employer, employee, consultant, director, investor, contractor, or otherwise, directly or indirectly, which is in competition with the casino, casino/hotel and/or casino/resort businesses conducted by the Company or any of its subsidiaries or affiliates in the United States, Canada or Mexico or such other location that the Company or an affiliate of the Company conducts significant business operations (a) with respect to periods prior to the termination of Executive’s employment with the Company and its affiliates, at any time during Executive’s active employment period and (b) with respect to periods following the termination of Executive’s employment with the Company and its affiliates, at any time during the twelve months preceding the termination of Executive’s employment with the Company and its affiliates. Notwithstanding anything herein to the contrary, this Section 12.1 shall not prevent Executive from: (i) acquiring securities representing not more than 1% of the outstanding voting securities of any entity the securities of which are traded on a national securities exchange or in the over the counter market; or (ii) obtaining employment in the hotel/resort industry for an entity that does not engage in the casino business. Executive acknowledges that the restrictions described above are reasonable as to both time and geographic scope, as the Company competes for customers with all gaming establishments in these areas. For purposes of this Agreement, “ Non-Compete Period ” shall mean the following: (w) if the Executive has voluntarily terminated employment with the Company without Good Reason, the notice period under Section 10 (including for the avoidance of doubt, the six-month notice period in the event Executive is going to work or act in competition with the Company as described in this Section 12); (x) (1) if the Company has terminated Executive’s employment with the Company without Cause, (2) if Executive has terminated employment with the Company with Good Reason or (3) if the Company delivers to Executive a Notice of Non-Renewal in accordance with Section 1, the period during which the Company is obligated to pay Executive severance pursuant to Section 9.1, (y) if the Company has terminated Executive’s employment with the Company for Cause, six (6) months, or (z) if the Executive’s employment with the Company is terminated due to disability, the salary continuation period pursuant to Section 9.4. 12.2 If Executive breaches any of the covenants in Section 12.1, then the Company may terminate any of his or her rights under this Agreement, whereupon all of the Company’s obligations under this Agreement shall terminate without further obligation to him or her except for obligations that have been paid (except as otherwise provided in Section 12.6), accrued or are vested as of or prior to such termination date. In addition, the Company shall be entitled to seek to enforce any such covenants, including obtaining monetary damages, specific performance and injunctive relief. Executive’s Options and Option Shares will be treated in accordance with the terms of the New Option Plan. 12.3 During the Employment Term (so long as Executive remains employed by the Company or its affiliates) and for a period of eighteen (18) months following the termination of Executive’s employment with the Company and its affiliates, Executive will not, directly or indirectly hire, induce, persuade or attempt to induce or persuade, any salary grade M50 or higher employee of the Company or its subsidiaries, to leave or abandon employment with the Company, its subsidiaries or affiliates, for any reason whatsoever (other than Executive’s personal secretary and/or assistants). 12.4 During the Employment Term (so long as Executive remains employed by the Company or its affiliates) and for a period of eighteen (18) months following the termination of Executive’s employment with the Company and its affiliates, Executive will not communicate with employees, customers, or suppliers of the Company, or its subsidiaries or affiliates of the Company or any principals or employee thereof, or any person or organization in any manner whatsoever that is detrimental to the business interests of the Company, its subsidiaries or affiliates. Executive further agrees from the end of Executive’s full-time employment with the Company and its affiliates not to make statements to the press or general public with respect to the Company or its subsidiaries or affiliates that are detrimental to the Company, its subsidiaries, affiliates or employees without the express written prior authorization of the Company, and the Company agrees that it will not make statements to the press or general public with respect to Executive that are detrimental to him or her without the express written prior authorization of Executive. Notwithstanding the foregoing, Executive shall not be prohibited at the expiration of the non-competition period from pursuing his or her own business interests that may conflict with the interests of the Company. 12.5 Each of Executive and the Company intends and agrees that if, in any action before any court, agency or arbitration tribunal legally empowered to enforce the covenants in this Section 12, any term, restriction, covenant or promise contained herein is found to be unreasonable and, accordingly, unenforceable, then such term, restriction, covenant or promise shall be deemed modified to the extent necessary to make it enforceable by such court, agency or arbitration tribunal. 12.6 Should any court, agency or arbitral tribunal legally empowered to enforce the covenants contained in this Section 12 find that Executive has breached the terms, restrictions, covenants or promises herein in any material respect (except to the extent it has been modified to make it enforceable): (a) the Company will not be obligated to continue to pay Executive the salary or benefits provided for under the severance provisions contained in the Agreement (including all required benefits under benefit plans), and (b) Executive will reimburse the Company any severance benefits received after the date of termination as well as any reasonable costs and attorney fees necessary to secure such repayments. For the avoidance of doubt, the Company shall be entitled to money damages and/or injunctive relief due to Executive’s breach of the terms, restrictions, covenants or promises contained in this Section 12 without regard to whether or not such breach is material, it being understood that the limiting effect of the phrase “in any material respect” in the immediately preceding sentence shall operate solely with respect to the remedies available pursuant to this Section 12.6. 12.7 For the avoidance of doubt, for purposes of this Section 12, “Executive's employment” shall not include any period of salary continuation hereunder. 12.8 This Section and all of its provisions will survive Executive’s separation from employment for any reason. 13. Confidentiality . 13.1 Executive’s position with the Company will or has resulted in his or her exposure and access to confidential and proprietary information which he or she did not have access to prior to holding the position, which information is of great value to the Company and the disclosure of which by him or her, directly or indirectly, would be irreparably injurious and detrimental to the Company. During his or her term of employment and without limitation thereafter, Executive agrees to use his or her best efforts and to observe the utmost diligence to guard and protect all confidential or proprietary information relating to the Company from disclosure to third parties. Executive shall not at any time during and after the end of his or her full-time active employment, make available, either directly or indirectly, to any competitor or potential competitor of the Company or any of its subsidiaries, or their affiliates, or divulge, disclose, communicate to any firm, corporation or other business entity in any manner whatsoever, any confidential or proprietary information covered or contemplated by this Agreement, unless expressly authorized to do so by the Company in writing. Notwithstanding the above, Executive may provide such Confidential Information if ordered by a federal or state court, arbitrator or any governmental authority, pursuant to subpoena, or as necessary to secure legal and financial counsel from third party professionals or to enforce his or her rights under this Agreement. In such cases, Executive will use his or her reasonable best efforts to notify the Company, at least five (5) business days prior to providing such information, including the nature of the information required to be provided. 13.2 For the purpose of this Agreement, “ Confidential Information ” shall mean all information of the Company, its subsidiaries and affiliates relating to, or useful in connection with, the business of the Company, its subsidiaries and affiliates, whether or not a “trade secret” within the meaning of applicable law, which is not generally known to the general public and which has been or is from time to time disclosed to, or developed by, Executive as a result of his or her employment with the Company. Confidential Information includes, but is not limited to, the Company’s product development and marketing programs, data, future plans, formula, food and beverage procedures, recipes, finances, financial management systems, player identification systems (Total Rewards), pricing systems, client and customer lists, organizational charts, salary and benefit programs, training programs, computer software, business records, files, drawings, prints, prototyping models, letters, notes, notebooks, reports, and copies thereof, whether prepared by him, her or others, and any other information or documents which Executive is told or reasonably ought to know that the Company regards as confidential. 13.3 Executive agrees that upon separation from employment for any reason whatsoever, he or she shall promptly deliver to the Company all Confidential Information, including but not limited to documents, reports, correspondences, computer printouts, work papers, files, computer lists, telephone and address books, rolodex cards, computer tapes, disks, and any and all records in his or her possession (and all copies thereof) containing any such Confidential Information, and all items created in whole or in part by Executive within the scope of his or her employment even if the items do not contain Confidential Information. 13.4 Executive shall also be required to sign a non-disclosure or confidentiality agreement if Executive is not currently a party to such an agreement with the Company. Such agreement shall also remain in full force and effect, provided that , in the event of any conflict between any such agreement(s) and this Agreement, this Agreement shall control. The form of non-disclosure or confidentiality agreement is attached hereto as Exhibit C . 13.5 This Section and all of its provisions will survive Executive’s separation from employment for any reason. 14. Injunctive Relief . Executive acknowledges and agrees that the terms provided in Sections 12 and 13 are the minimum necessary to protect the Company, its affiliates and subsidiaries, and their successors and assigns, in the use and enjoyment of the Confidential Information and the good will of the business of the Company. Executive further agrees that damages cannot fully and adequately compensate the Company in the event of a breach or violation of the restrictive covenants set forth herein and that without limiting the right of the Company to pursue all other legal and equitable remedies available to it, the Company shall be entitled to seek injunctive relief, including but not limited to a temporary restraining order, preliminary injunction and permanent injunction, to prevent any such violations or any continuation of such violations for the protection of the Company. The granting of injunctive relief will not act as a waiver by the Company of its right to pursue any and all additional remedies. 15. Post Employment Cooperation . Executive agrees that upon separation for any reason from the Company, Executive will cooperate in assuring an orderly transition of all matters being handled by him or her. Upon the Company providing reasonable notice to him or her, he or she will also appear as a witness at the Company’s request and/or assist the Company in any litigation, bankruptcy or similar matter in which the Company or any affiliate thereof is a party or otherwise involved. The Company will defray any reasonable out-of-pocket expenses incurred by Executive in connection with any such appearance. In connection therewith, the Company agrees to indemnify Executive as prescribed in Article Tenth of the Certificate of Incorporation, as amended, of the Company. 16. Release . Upon the termination of Executive’s active full-time employment, and in consideration of and as a condition to the actual receipt of all compensation and benefits described in this Agreement (including without limitation any severance payments pursuant to this Agreement or the Severance Agreement), except for claims arising from the covenants, agreements, and undertakings of the Company as set forth herein and except as prohibited by statutory language, Executive and the Company will enter into an agreement which forever and unconditionally waives and releases Harrah’s Entertainment, Inc., Harrah’s Operating Company, Inc., their subsidiaries and affiliates, and their officers, directors, agents, benefit plan trustees, and employees from any and all claims, whether known or unknown, and regardless of type, cause or nature, including but not limited to claims arising under all salary, vacation, insurance, bonus, stock, and all other benefit plans, and all state and federal anti-discrimination, civil rights and human rights laws, ordinances and statutes, including Title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act, concerning Executive’s employment with Harrah’s Entertainment, Inc., its subsidiaries and affiliates, the cessation of that employment and Executive’s service as a shareholder, employee, officer and director of the Company and its subsidiaries. The form of release is set forth in Exhibit B . 17. Assumption of Agreement on Merger, Consolidation or Sale of Assets . In the event the Company agrees to (a) enter into any merger or consolidation with another company in which the Company is not the surviving company or (b) sell or dispose of all or substantially all of its assets, and the company which is to survive fails to make a written agreement with Executive to either: (1) assume the Company’s financial obligations to Executive under this Agreement or (2) make such other provision for Executive as is reasonably satisfactory to Executive, then Executive shall have the right to resign for Good Reason as defined under this Agreement. 18. Assurances on Liquidation . The Company agrees that until the termination of this Agreement as above provided, it will not voluntarily liquidate or dissolve without first making a full settlement or, at the discretion of Executive, a written agreement with Executive satisfactory to and approved by him or her in writing, in fulfillment of or in lieu of its obligations to him or her under this Agreement. 19. Amendments; Entire Agreement . This Agreement may not be amended or modified orally, and no provision hereof may be waived, except in a writing signed by the parties hereto. This Agreement and the New Option Plan contain the entire agreement between the parties concerning the subject matter hereof and supersede all prior agreements and understandings, written and oral, between the parties with respect to the subject matter of this Agreement and the New Option Plan, including without limitation the Prior Employment Agreement. 20. Assignment . 20.1 Except as otherwise provided in Section 20.2, this Agreement cannot be assigned by either party hereto, except with the written consent of the other. Any assignment of this Agreement by either party shall not relieve such party of its or his or her obligations hereunder. 20.2 The Company may elect to perform any or all of its obligations under this Agreement through a subsidiary or affiliate, and if the Company so elects, Executive will be an employee of such subsidiary or affiliate. Notwithstanding any such election, the Company’s obligations to Executive under this Agreement will continue in full force and effect as obligations of the Company, and the Company shall retain primary liability for their performance. 21. Binding Effect . This Agreement shall be binding upon and inure to the benefit of the personal representatives and successors in interest of the Company. 22. Governing Law . This Agreement shall be governed by the laws of the State of Nevada as to all matters, including but not limited to matters of validity, construction, effect and performance. 23. Jurisdiction . Any judicial proceeding seeking to enforce any provision of, or based on any right arising out of, this Agreement or any agreement identified herein may be brought only in state or federal courts of the State of Nevada, and by the execution and delivery of this Agreement, each of the parties hereto accepts for themselves the exclusive jurisdiction of the aforesaid courts and irrevocably consents to the jurisdiction of such courts (and the appropriate appellate courts) in any such proceedings, waives any objection to venue laid therein and agrees to be bound by the judgment rendered thereby in connection with this Agreement or any agreement identified herein. 24. Notices . Any notice to be given hereunder by either party to the other may be effected by personal delivery, in writing, or by mail, registered or certified, postage prepaid with return receipt requested. Mailed notices shall be addressed to the parties at the addresses set forth below, but each party may change his, her or its address by written notice in accordance with this Section 24. Notices shall be deemed communicated as of the actual receipt or refusal of receipt. If to Executive: ________________________________ ________________________________ 25. Construction . This Agreement is to be construed as a whole, according to its fair meaning, and not strictly for or against any of the parties. 26. Severability . If any provision of this Agreement shall be determined by a court to be invalid or unenforceable, the remaining provisions of this Agreement shall not be affected thereby, shall remain in full force and effect, and shall be enforceable to the fullest extent permitted by applicable law. 27. Withholding Taxes . Any payments or benefits to be made or provided to Executive pursuant to this Agreement shall be subject to any withholding tax (including social security contributions and federal income taxes) as shall be required by federal, state, and local withholding tax laws. 28. Counterparts . This Agreement may be executed by the parties in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same agreement. [Signature Page Follows] If to Company: Harrah’s Operating Company, Inc. One Caesars Palace Drive Las Vegas, NV 89109 Attn: Corporate Secretary IN WITNESS WHEREOF, Executive has hereunto set his or her hand and the Company has caused this Agreement to be executed in its name and on its behalf and its corporate seal to be hereunto affixed and attested by its corporate officers thereunto duly authorized. /s/Timothy R. Donovan Executive Harrah’s Operating Company, Inc. By: /s/ Mary Thomas Name: Mary Thomas Its: Senior Vice President Human Resources__ Addendum For purposes of that certain Employment Agreement between Harrah’s Operating Company, Inc. and Timothy R. Donovan (“ Executive ”) dated as of April 2, 2009 (the “ Agreement Date ”), “felony” as set forth in Section 11.1(a)(ii)(B) shall include, without limitation, the charges levied against Executive in Argentina and pending as of the Agreement Date. Exhibit A • Medical Insurance (including health, dental and vision) • Life Accident Insurance • Accrued benefits under Savings and retirement plan • D&O Insurance • Financial Counseling (in accordance with Company policy, maximum benefit is funds allocated as of Separation Date – no new funds) Exhibit B GENERAL RELEASE THIS GENERAL RELEASE (the “ Release ”) is entered into between Harrah’s Operating Company, Inc. (the “ Company ”) and [ ] (the “ Employee ”) as of the _____ day of ________________, _______. The Company and the Employee agree as follows: 1. Employment Status . The Employee’s employment with the Company shall terminate effective as of __________________, ________________ (the “ Separation Date ”). 2. Payment and Benefits . Upon the effectiveness of the terms set forth herein, the Company shall provide the Employee with all of the applicable payments and benefits set forth in the Employment Agreement between the Company and the Employee, dated as of ______, ______ (as amended from time to time, the “ Employment Agreement ”). 3. No Liability . This Release does not constitute an admission by the Company, or any of its subsidiaries, affiliates, divisions, trustees, officers, directors, partners, agents, or employees, or by the Employee, of any unlawful acts or of any violation of federal, state or local laws. 4. Release . In consideration of the payments and benefits set forth in Section 9.1 (Termination Without Cause; Resignation for Good Reason; Company Failure to Renew) of the Employment Agreement, the Employee for himself, his heirs, administrators, representatives, executors, successors and assigns (collectively, “ Employee Releasors ”) does hereby irrevocably and unconditionally release, acquit and forever discharge the Company and each of its subsidiaries, affiliates, divisions, successors, assigns, trustees, officers, directors, partners, agents, and former and current employees, including without limitation all persons acting by, through, under or in concert with any of them, including without limitation the Sponsors (as defined in the Management Investor Rights Agreement, dated as of January 28, 2008 among the Company, Employee and the other parties specified therein) (collectively, “ Company Releasees ”), and each of them from any and all charges, complaints, claims, liabilities, obligations, promises, agreements, controversies, damages, remedies, actions, causes of action, suits, rights, demands, costs, losses, debts and expenses (including attorneys’ fees and costs) of any nature whatsoever, known or unknown, whether in law or equity and whether arising under federal, state or local law and in particular including any claim for discrimination based upon race, color, ethnicity, sex, national origin, religion, disability age (including without limitation under the Age Discrimination in Employment Act of 1967 as amended by the Older Workers Benefit Protection Act (“ ADEA ”), Title VII of the Civil Rights Act of 1964 as amended by the Civil Rights Act of 1991, the Equal Pay Act of 1962, and the Americans with Disabilities Act of 1990) or any other unlawful criterion or circumstance, which Employee Releasors had, now have, or may have or claim to have in the future against each or any of the Company Releasees by reason of any matter, cause or thing occurring, done or omitted to be done from the beginning of the world until the date of the execution of this Release; provided , however , that nothing herein shall release (i) any obligation of Company under Section 9 (Termination of Employment), Section 19 (Amendments; Entire Agreement) or Section 23 (Jurisdiction) of the Employment Agreement or (ii) any right of indemnification or to director and officer liability insurance coverage under any of the company’s organizational documents or at law under any plan or agreement and applicable to the Employee. In addition, nothing in this Release is intended to interfere with the Employee’s right to file a charge with the Equal Employment Opportunity Commission in connection with any claim the Employee believes he may have against the Company Releasees. However, by executing this Release, the Employee hereby waives the right to recover in any proceeding that the Employee may bring before the Equal Employment Opportunity Commission or any state human rights commission or in any proceeding brought by the Equal Employment Opportunity Commission or any state human rights commission on the Employee’s behalf. In addition, this release is not intended to interfere with the Employee’s right to challenge that his waiver of any and all ADEA claims pursuant to this Release is a knowing and voluntary waiver, notwithstanding the Employee’s specific representation to the Company that he has entered into this Agreement knowingly and voluntarily. As of the Separation Date, Employee acknowledges and represents that Employee has not been either directly or indirectly involved in, witnessed or asked or directed to participate in any conduct that could give rise to an allegation that the Company or any of its subsidiaries or affiliates has violated any laws applicable to its businesses or that could otherwise be construed as inappropriate or unethical in any way, even if such conduct is not, or does not appear to be, a violation of any law. Employee confirms that Employee has been given the opportunity to report such conduct to the Company and to third parties and that Employee has not made such report. Employee also confirms that Employee has no charge, complaint or action against the Company or any Company Releasees in any forum or form. 5. Bar . The Employee acknowledges and agrees that if he should hereafter make any claim or demand or commence or threaten to commence any action, claim or proceeding against the Company Releasees with respect to any cause, matter or thing which is the subject of the release under Paragraph 4 of this Release (other than a claim brought under ADEA), this Release may be raised as a complete bar to any such action, claim or proceeding, and the applicable Company Releasee may recover from the Employee all costs incurred in connection with such action, claim or proceeding, including attorneys’ fees. 6. Restrictive Covenants . The Employee acknowledges that the provisions of Section 12 (Non-Competition Agreement) through Section 15 (Post Employment Cooperation), inclusive, of the Employment Agreement shall continue to apply pursuant to their terms. 7. Governing Law . This Release shall be governed by and construed in accordance with the laws of the State of Nevada, without regard to conflicts of laws principles. 8. Acknowledgment . The parties hereto have read this Release, understand it, and voluntarily accept its terms, and the Employee acknowledges that he has been advised by Company to seek the advice of legal counsel before entering into this Release, and has been provided with a period of twenty-one (21) days in which to consider entering into this Release. 9. Revocation . The Employee has a period of seven (7) days following the execution of this Release during which the Employee may revoke this Release, and this Release shall not become effective or enforceable until such revocation period has expired. If, within the ten (10) day period following such expiration, Company fails to execute this Release, then this Release shall become null and void and have no force or effect. 10. Counterparts . This Release may be executed by the parties hereto in counterparts, which taken together shall be deemed one original. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] IN WITNESS WHEREOF, Employee has hereunto set his or her hand and the Company has caused this Release to be executed in its name and on its behalf and its corporate seal to be hereunto affixed and attested by its corporate officers thereunto duly authorized. Employee Harrah’s Operating Company, Inc. By: Name: Its: ____________________________________________________ Exhibit C EMPLOYEE'S AGREEMENT (CONCERNING PROTECTED AND CONFIDENTIAL COMPANY INFORMATION AND MATERIALS) In consideration of, and as a condition precedent to, my employment and/or continued employment, with Harrah's Operating Company, Inc., or one of its direct or indirect subsidiaries (hereinafter referred to jointly as the "Company"), and for other good and valuable consideration, including but not limited to any future, additional compensation, bonus, stock options, 401(k) matching contributions and other benefits, I hereby specifically agree as follows: 1. I recognize that the Company is engaged in the business of developing, owning and/or managing casinos and related hotels, as well as other gaming related activity. I understand that the Company has developed and is the owner of certain commercially valuable technical and non-technical information, which is not public knowledge, which is a valuable asset essential to and used in the business of the Company. A non-exhaustive list of examples of such Confidential Information is: computer programs including software related documentation, source codes, object codes, technical plans, processes, methods, practices, algorithms and the reports derived from such processes, manuals and databases; internal financial data; marketing programs, strategies and campaigns; internal manuals; new product development plans and ideas; lists of customers, including those lists obtained and maintained by the Company during my employment; and designs, blueprints, architectural plans and engineering data. I acknowledge that the Confidential Information is proprietary to the Company and that, as such, some of the information, including but not limited to that involving computer programs, is treated as a trade secret by the Company and is also protected by certain copyright laws. I recognize and agree that the Company is engaged in a highly competitive industry and that the maintenance of the secret nature of this information is essential to preserving its value to the Company; that disclosure of any of this information would be detrimental to and cause substantial harm to the Company; and that as I have or may have access to or be informed of such information during the course of my employment, that I am obligated to and will safeguard all such information during my employment with the Company. I further agree that I will not duplicate, reverse engineer, alter, replicate or modify the Confidential Information or any part of the Confidential Information made available to me nor disclose to any third party any Confidential Information. 2. In addition to the information developed and owned by the Company that is confidential, I also understand that certain information received from third parties is also confidential and proprietary. Third parties may include, but not be limited to, any and all tribal entities, business enterprises, or other organizations or individuals who have relationships with the Company. To this end, any information received by me from third parties during any furtherance of my obligations as an employee of the Company which concerns the personal, financial, or other affairs of the third party will be treated in full confidence and will not be revealed to any other persons, firms, or organizations and shall be governed by this Agreement in the same manner as the Company’s confidential and proprietary information. 3. I agree that any work, invention, innovation, idea or report that I produce in connection with my work for the Company, or which results from or is suggested by the work I do for or on behalf of the Company is a "work for hire", and will be the sole property of the Company. (Such work, inventions, innovations, ideas, and reports are referred to as the "Work".) The foregoing applies whether or not the Work was conceived or performed during Company hours or on Company equipment. I agree that I will execute all necessary documents or take other actions necessary to assist the Company in obtaining patents, copyrights or other legal protection of the Work for the Company's benefit (although the Work will be the exclusive property of the Company whether or not patented or copyrighted). 4. I will not at any time, directly or indirectly, either during my employment or for two years thereafter, disclose to any person, corporation or other entity which offers any product or service which is, in any way, in competition with any product or service offered by the Company, or use in competition with the Company, any of the Company's confidential or proprietary information, except on behalf of the Company, without first obtaining the Company's written consent thereto, which consent can be given only by a duly authorized officer of the Company. 5. Upon the termination of my employment for any reason whatsoever, I will promptly deliver to the Company all documents, computer software, files, databases, drawings, prints, prototypes, models, manuals, letters, lists, notes, notebooks, reports and copies thereof, whether prepared by me or others, all other material of a secret, confidential or proprietary nature relating to the Company's business, and any other document relating or referring to such material. 6. If I am or become an employee of the Company in Salary Band I or above (manager or above), I recognize that both I and all others in Salary Band I or above (manager or above) are key employees of the Company who have special and unique knowledge of the Company's operations and personnel and who, as a result of those and other factors, occupy positions of trust and responsibility which bring with them a special duty of care and loyalty to the Company. I recognize that the Company has substantial good will in the casino gaming industry which reaches beyond the Company location at which I am currently employed. I also recognize that the Company has spent substantial time and has incurred substantial expense in maintaining and creating customer good will among its manager-level employees; that the training, experience, skills and unique knowledge of the Company's operation are an integral part of, and are necessary for, an efficient, profitable operation; and that, therefore, the Company has a protectable business interest in maintaining these employees. I understand that my solicitation of any manager-level employee, with whom I have had a reporting relationship (up or down) or other direct contact or association while employed by the Company or thereafter, for employment at a casino and/or related hotel which competes with the Company in the gaming business would cause detrimental and irreparable harm to the Company. Accordingly, neither during my employment with the Company nor for eighteen (18) months following the cessation of that employment will I either directly or indirectly induce, persuade, solicit, or attempt to induce or persuade any Company employee in Salary Band I or above (manager or above) as described above in this paragraph to leave or abandon his/her employment with the Company for employment at a casino and/or related hotel which competes with the Company in the gaming business. I understand that such inducement, persuasion and/or solicitation includes, but is not limited to, recommending that the manager-level employee contact any person affiliated with a competitor of the Company in the gaming business. 7. I understand and agree that a breach by me of any of the obligations set forth above will cause the Company to suffer irreparable harm. Accordingly, I understand and agree that if I breach any of my obligations set forth above, the Company has the right to petition a court for, and to obtain therefrom, an injunction enjoining me from breaching any such obligations. I further understand and agree that, to the extent that they can be proven by the Company, I will be liable for such monetary damages as a result from any breach by me of my obligations set forth above prior to such breach being enjoined by the Company. 8. The Company's rights and my obligations created by this Agreement are intended to be in addition to, and not in limitation of, any obligation I may have, or right the Company may have, under otherwise applicable law. This Agreement replaces any prior "Employee's Agreement (Concerning Protected and Confidential Information and Materials)." Also, this Agreement and the obligations referred to herein are separate from and in addition to any other obligations I may have to the Company. I understand that I have an affirmative obligation to advise any future employer of mine of the existence of this Agreement and to provide said employer with a copy of the Agreement; and that the Company may also advise and provide any future employer a copy of this Agreement. I specifically acknowledge that both my obligations and the Company's remedies hereunder are fair and reasonable. 9. If any provision of this Agreement is held to be unenforceable, I understand and agree that such unenforceability shall not affect any other provision hereof and that the remainder of the Agreement shall be enforceable. I also agree that the Company may assign its rights under this Agreement to any parent, subsidiary, or affiliate or to any successor entity that becomes my employer through any merger, spin-off, reorganization or restructuring. 10. I agree that this Agreement shall be governed by and construed under the laws of the State of ____________ (where employed), and I hereby consent to the jurisdiction of the courts of the State of ____________ (where employed) in any action brought by the Company to enforce this Agreement. I further agree that I will pay all costs and expenses, including reasonable attorneys fees, incurred by the Company in enforcing any of my obligations under this Agreement. [Signature Page Follows] COMPANY EMPLOYEE Mary Thomas Printed: Timothy R. Donovan By: /s/Mary Thomas Signed: /s/ Timothy R. Donovan Date: April 2, 2009 Date: April 2 2009 ACKNOWLEDGEMENT The undersigned hereby acknowledges that he/she has received, read and understands the Harrah’s Operating Company, Inc., or one of its direct or indirect subsidiaries, Employee’s Agreement (Concerning Protected and Confidential Company Information and Materials). __ /s/ Timothy R. Donovan __________ Signature ___ Timothy R. Donovan ___________ Printed Name Date: ___ April 2, 2009 ____________ Exhibit 10.90 CAESARS ENTERTAINMENT CORPORATION 2009 SENIOR EXECUTIVE INCENTIVE PLAN (amended and restated December 7, 2012) I. PURPOSE The purposes of the Caesars Entertainment Corporation 2009 Senior Executive Incentive Plan (as amended and restated, the “Plan”) are: 1) to attract and retain highly qualified individuals; 2) to obtain from each the best possible performance; 3) to establish a performance goal based on objective criteria; 4) to further underscore the importance of achieving business objectives for the short and long term; and 5) to include in such individual’s compensation package annual and long-term incentive components which are tied directly to the achievement of those objectives. Such components are intended to qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), so as to be fully deductible by Caesars Entertainment Corporation, formerly known as Harrah’s Entertainment, Inc. (“Caesars”), and its subsidiary companies (collectively, the “Company”), and to not constitute deferred compensation within the meaning of Section 409A of the Code. This Plan amends and restates in its entirety the Harrah’s Entertainment, Inc. 2009 Senior Executive Incentive Plan, originally effective January 1, 2009 (the “Original Plan”). II. EFFECTIVE DATE; TERM The Plan (as amended and restated) is effective as of December 7, 2012 (the “Effective Date”), subject to approval by the affirmative vote of a majority of the voting shares of Caesars, and shall remain in effect until such time as it shall be terminated by the Human Resources Committee of the Board of Directors of Caesars or any successor thereto, or a successor thereof (the “Committee”). III. ELIGIBILITY AND PARTICIPATION Eligibility to participate in the Plan is limited to senior executives of the Company who are or who at some future date may be subject to Section 16 of the Securities Exchange Act of 1934, as amended, and such other senior executives of the Company designated as eligible for participation by the Committee. Participants in the Plan (“Participants”) shall be selected annually by the Committee from those senior executives who are eligible to participate in the Plan. IV. BUSINESS CRITERIA The Plan’s performance goal shall be based upon the Company’s EBITDA. The “Company’s EBITDA” shall mean the Company’s consolidated net income before deductions for interest expense, income tax expense, depreciation expense, amortization expense for the performance period, each computed in accordance with accounting principles generally accepted in the U.S. (“GAAP”). The Committee may make adjustments to the calculation of the Company’s EBITDA when the performance goal is established. V. PERFORMANCE GOAL AND PERFORMANCE PERIODS The performance goal of each award under will be attained if the Company’s EBITDA for the performance period is positive. Performance periods under this Plan shall consist of periods consisting of one or more fiscal years of the Company, or portions thereof, as designated by the Committee. Performance periods in the Plan may overlap. By no later than the latest time permitted by Section 162(m) of the Code (generally, for performance periods of one year or more, no later than 90 days after the commencement of the performance period) and while the performance relating to the performance goal remains substantially uncertain within the meaning of Section 162(m) of the Code, the Committee shall grant awards for Participants for such performance period, which shall be the maximum awards specified in Section VI or such lesser awards as the Committee may determine. Subject to the foregoing and to the limitations set forth in Section VI, no awards shall be paid to Participants unless and until the Committee makes a certification in writing with respect to the amount of the Company’s EBITDA as required by Section 162(m) of the Code. VI. DETERMINATION OF AMOUNTS OF AWARDS The Committee may grant awards to Participants which shall be payable if the Company’s EBITDA is positive. The maximum aggregate amount of any award payable to any Participant for any single fiscal year of the Company shall be one half percent (0.5%) of the Company’s EBITDA for such period. The Committee shall have authority to exercise discretion in determining the amount of the award granted to each Participant at the beginning of a performance period and to exercise discretion to reduce the amount of an award which shall be payable to each Participant at the end of each performance period, subject to the terms, conditions and limits of the Plan. The Committee may at any time establish (and once established, rescind, waive or amend) additional conditions and terms of payment of awards (including but not limited to the achievement of other financial, strategic or individual goals, which may be objective or subjective) as it deems desirable in carrying out the purposes of the Plan and may take into account such other factors as it deems appropriate in administering any aspect of the Plan. However, the Committee shall have no authority to increase the amount of an award granted to any Participant or to pay an award under the Plan in excess of the maximum targeted bonus set forth above. In determining the amount of any award to be granted or to be paid to any Participant, the Committee shall give consideration to the contribution which may be or has been made by the Participant to achievement of the Company’s established objectives and such other matters as it shall deem relevant. The payment of an award to a Participant with respect to any performance period shall be conditioned upon the Participant’s employment by the Company on the last day of the performance period; provided, however, that in the discretion of the Committee, awards may be paid to Participants who have retired or whose employment has terminated after the beginning of the period for which an award is made, or to the designee or estate of a Participant who died during such period to the extent permitted by Section 162(m) of the Code. Notwithstanding the foregoing, there is no right of any Participant to receive any payment upon retirement or other termination of employment, and such award, if any, will be made at the sole discretion of the Committee and no payment shall be made if the Company’s EBITDA is not positive. VII. FORM OF AWARDS All awards shall be determined by the Committee and shall be paid in cash. VIII. PAYMENT OF AWARDS An award shall be paid no later than 2 ½ months following the end of the applicable performance period with respect to which the award has been granted. Following the end of the applicable performance period with respect to which an award has been granted, the Committee shall certify, in writing, that (a) the amount payable in respect of such award does not exceed the limitations set forth in Section VI and (b) the amount payable to a Participant in respect of such award does not exceed the amount of the maximum targeted award granted to such Participant at the beginning of the performance period. If the Committee deems it appropriate or advisable, it may request a report from a public accounting firm stating the amount of the Company’s EBITDA for such performance period. IX. CLAWBACK AND FORFEITURE Notwithstanding anything to the contrary contained in the Plan, unless a written agreement evidencing the grant of an award (if any) provides otherwise: (a) in the event of an accounting restatement due to material noncompliance by the Company with any financial reporting requirement under applicable securities laws that reduces the amount payable or due in respect of an award under the Plan that would have become payable had the Company’s EBITDA been properly reported (as determined by the Committee), (i) the award will be cancelled and (ii) a Participant will forfeit the cash payable pursuant to the award and the amount(s) (if any) paid to the Participant in respect of the award (and the Participant may be required to return or pay such amount to the Company); (b) if, following a Participant’s termination of employment with the Company, the Committee determines that the Company had grounds to terminate such Participant for “cause” (as such term is defined in the Committee’s discretion, or as set forth in a written employment or award agreement between the Company and the Participant) then the Committee may, in its sole discretion, (i) cancel any outstanding portion of an award granted under the Plan (whether earned or unearned) that is held by such Participant without payment therefor and/or (ii) require the Participant or other person to whom any payment has been made in connection with such award after the date of the conduct constituting cause, to forfeit and pay to the Company, on demand, all or any portion of the amount(s) received upon the payment of any other award granted under the Plan following the date of the conduct constituting cause; (c) to the extent required (i) by applicable law (including without limitation the Sarbanes Oxley Act and Section 954 of the Dodd Frank Act), (ii) the rules and regulations of any United States national securities exchange or inter-dealer quotation system on which shares of Caesars common stock are listed or quoted, and/or (iii) pursuant to a written policy adopted by the Company (as in effect and/or as amended from time to time), awards under the Plan shall be subject (including on a retroactive basis) to clawback, forfeiture or similar requirements (and such requirements shall be deemed incorporated by reference into the Plan and all written agreements evidencing the grant of any outstanding award (if any)). X. SPECIAL AWARDS AND OTHER PLANS Nothing contained in the Plan shall prohibit the Company from granting awards or authorizing other compensation to any person under any other plan or authority or limit the authority of the Company to establish other special awards or incentive compensation plans providing for the payment of incentive compensation to employees (including those employees who are eligible to participate in the Plan). XI. STOCKHOLDER APPROVAL The holders of the voting common stock of Caesars approved the Original Plan on December 11, 2008. The Plan (as amended and restated) shall be resubmitted to the holders of the voting common stock of Caesars for approval as required by Section 162(m) of the Code if it is amended in any way which changes the material terms of the Plan’s performance goal, including by materially modifying the performance goal, increasing the maximum award payable under the Plan or changing the Plan’s eligibility requirements, if awards under the Plan are intended to continue qualify as performance-based compensation under Section 162(m) of the Code. XII. ADMINISTRATION, AMENDMENT AND INTERPRETATION OF THE PLAN The Committee shall administer the Plan. The Committee shall consist solely of two or more members of the Board of Directors of Caesars who shall qualify as “outside directors” under Section 162(m) of the Code. The Committee shall have full power to construe and interpret the Plan, establish and amend rules and regulations for its administration, and perform all other acts relating to the Plan, including the delegation of administrative responsibilities, that it believes reasonable and proper and in conformity with the purposes of the Plan and the requirements of Section 162(m) of the Code. The Committee shall have the right to amend the Plan from time to time or to repeal it entirely or to direct the discontinuance of awards either temporarily or permanently; provided, however, that no amendment of the Plan that (1) changes the maximum award payable to any Participant as set forth in Section VI, (2) materially amends the definition of the Company’s EBITDA as used in Section IV or (3) changes to the criteria for being a Participant of the Plan, shall be effective before approval by the affirmative vote of a majority of voting common stock of Caesars. Any decision made, or action taken, by the Committee arising out of or in connection with the interpretation and/or administration of the Plan shall be final, conclusive and binding on all persons affected thereby. XIII. RIGHTS OF PLAN PARTICIPANTS Neither the Plan, nor the adoption or operation of the Plan, nor any documents describing or referring to the Plan (or any part hereof) shall confer upon any Participant any right to continue in the employ of the Company or shall interfere with or restrict in any way the rights of the Company, which are hereby expressly reserved, to discharge any Participant at any time for any reason whatsoever, with or without cause. No individual to whom an award has been made or any other party shall have any interest in the cash or any other asset of the Company prior to such amount being paid. No right or interest of any Participant shall be assignable or transferable, or subject to any claims of any creditor or subject to any lien. XIV. MISCELLANEOUS The Company shall deduct all federal, state and local taxes required by law or Company policy from any award paid hereunder. In no event shall the Company be obligated to make an award to any Participant for any period by reason of the Company’s payment of an award to such Participant in any other period, or by reason of the Company’s payment of an award to any other Participant or Participants in such period or in any other period. Nothing contained in this Plan shall confer upon any person any claim or right to any awards hereunder. Such awards shall be made at the sole discretion of the Committee. The Plan shall be unfunded. Amounts payable under the Plan are not and will not be transferred into a trust or otherwise set aside. The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the payment of any award under the Plan. Any accounts under the Plan are for bookkeeping purposes only and do not represent a claim against the specific assets of the Company. It is the intent of the Company that the Plan and awards made hereunder shall satisfy and shall be interpreted in a manner that satisfies any applicable requirements as qualified performance-based compensation within the meaning of Sections 162(m) and 409A of the Code. Any provision, application or interpretation of the Plan that is inconsistent with this intent to satisfy the standards in Sections 162(m) and 409A of the Code shall be disregarded. Any provision of the Plan that is prohibited or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of the Plan. The Plan and the rights and obligations of the parties to the Plan shall be governed by, and construed and interpreted in accordance with, the law of the State of Delaware (without regard to principles of conflicts of law). Exhibit 10.91 Omnibus Incentive Plan Caesars Entertainment Corporation Effective as of November 14, 2012 Table of Contents Article 1. Establishment, Purpose, and Duration 1 Article 2. Definitions 1 Article 3. Administration 3 Article 4. Eligibility and Participation 4 Article 5. Award Opportunity, Performance Goals, and Performance Period 4 Article 6. Employment and Participation 5 Article 7. Amendment and Termination 5 Article 8. Tax Withholding 5 Article 9. Successors 5 Article 10. Forfeiture Events 5 Article 11. Nature of the Plan 6 Article 12. Legal Construction 6 Article 13. Section 409A 7 Caesars Entertainment Corporation Omnibus Incentive Plan Article 1. Establishment, Purpose, and Duration 1.1 Establishment of the Plan. Caesars Entertainment Corporation, a Delaware corporation (the “ Company ”), hereby establishes an incentive compensation plan to be known as the “Caesars Entertainment Corporation Omnibus Incentive Plan” (hereinafter, and as hereafter amended from time to time in accordance herewith, referred to as the “ Plan ”), as set forth in this document. The Plan permits the payment of cash awards based upon the achievement of pre-defined goals established by the Committee. The Plan shall become effective as of November 14, 2012 (the “ Effective Date ”) and shall remain in effect as provided in Section 1.3 hereof. For purposes of clarification, the terms of the Plan apply to Awards granted based on 2012 performance and the payouts thereof in 2013. 1.2 Purpose of the Plan . The purpose of the Plan is to promote the interests of the Company and its stockholders by providing Participants with an appropriate incentive to encourage them to continue in the employ of the Company or an Affiliate of the Company and to improve the growth and profitability of the Company. 1.3 Duration of the Plan . The Plan shall commence on the Effective Date and shall remain in effect thereafter, subject to the right of the Committee to alter, amend, suspend, or terminate the Plan at any time and from time to time pursuant to Article 7 hereof. 1.4 Omnibus Nature of the Plan . Except as set forth in the following sentence, the provisions set forth in this Plan, including, but not limited to, the clawback provisions contained in Article 10 hereof, shall apply to all of the Company’s other compensation programs including, but not limited to, the compensation plans set forth on Exhibit A attached hereto, as such exhibit may be amended from time to time by the Committee (the “ Other Compensation Programs ”), but only to the extent that such Other Compensation Programs do not contain or otherwise provide for or conflict with such provisions. The provisions set forth in this Plan shall not apply to the 162(m) Plan or to the individuals governed by the 162(m) Plan. As used hereafter, the term “Plan” shall include Other Compensation Programs but specially excludes the 162(m) Plan. Article 2. Definitions Whenever used in this Plan, the following terms shall have the meanings set forth below, and when the meaning is intended, the initial letter of the word shall be capitalized: (a) “Affiliate” means any individual or company which controls, is controlled by or is under common control with the party, where “control” means the power to control the composition of the board of directors of such party (whether by contract, corporate law or other means), the possession of more than half of the voting equity share capital of such party or the ability to consolidate such company’s financial statements with those of the party in accordance with generally accepted accounting principles. (b) “Award” means a grant under the Plan of an cash incentive Award Opportunity to be earned by and paid to a Participant pursuant to the terms of the Plan. (c) “Award Opportunity” or “Award Opportunities” means the Award or Awards that a Participant can earn based upon the achievement of a preestablished performance goal or goals during a Performance Period as determined by the Committee and pursuant to the terms of the Plan. (d) “Board” means the Board of Directors of the Company or any committee appointed by the Board to administer the Plan pursuant to Section 3. (e) “Change in Control” means the occurrence of any of the following events after January 28, 2008: (i) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company on a consolidated basis to any Person or group of related Persons for purposes of Section 13(d) of the Exchange Act (a “ Group ”), together with any affiliates thereof other than to a Majority Stockholder; (ii) the approval by the holders of the outstanding voting securities of the Company of any plan or proposal for the liquidation or dissolution of the Company; (iii) any Person or Group (other than a Majority Stockholder) shall become the beneficial owner (within the meaning of Section 13(d) of the Exchange Act), directly or indirectly, of common stock representing more than 50% of the combined voting power of the Company entitled to vote generally in the election of directors; (iv) the replacement of a majority of the Board over a two–year period of the directors who constituted the Board at the beginning of such period, and such replacement shall not have been approved by a vote of at least a majority of the Board then still in office who either were members of such Board at the beginning of such period or whose election as a member of such Board was previously so approved or who were nominated by, or designees of, a Majority Stockholder; or (v) consummation of a merger, consolidation or other transaction involving the Company following which the Majority Stockholder does not hold capital stock or other securities of the surviving corporation (A) with voting power to elect a majority of the surviving entity’s board of directors or (B) representing at least 50% of the equity securities of the surviving entity. (f) “Code” means the Internal Revenue Code of 1986, as amended from time to time. (g) “Committee” means the Human Resources Committee of the Board or such other Committee appointed by the Board to administer the Plan with respect to grants of awards. (h) “Director” means any individual who is a member of the Board. (j) “Employee” means any employee of the Company. (k) “ Exchange Act ” means the Securities Exchange Act of 1934, as amended. (i) “Disability” shall mean (i) the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) the Participant is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company. (l) “ Majority Stockholder ” means, collectively or individually as the context requires, TPG Capital, L.P., Apollo Global Management, LLC and/or their respective Affiliates. (m) “Participant” means an Employee who has been selected to participate in the Plan pursuant to Article 4 herein. (o) “Performance Period” means each consecutive 12 month period commencing on January 1 of each year during the term of this Plan and coinciding with the Company’s fiscal year during which performance goals must be achieved for a Participant to earn an Award, as determined by the Committee. Article 3. Administration 3.1 The Committee. The Plan shall be administered by the Committee. In the absence of a Committee, the Board shall function as the Committee for all purposes under the Plan, and to the extent that the Board so acts, references in the Plan to the Committee shall refer to the Board, as applicable . 3.2 Authority of the Committee. Except as limited by law or by the certificate of incorporation or bylaws of the Company, as each may be amended or amended and restated from time to time, and subject to the provisions herein, the Committee shall have full and absolute discretionary power to select Employees to participate in the Plan; determine the terms and conditions of Awards in a manner consistent with the Plan; construe and interpret the Plan and any agreement or instrument entered into under the Plan; establish, amend, or waive rules and regulations for the Plan’s administration; and, subject to the provisions of Article 7 herein, amend the terms and conditions of any outstanding Award to the extent such terms and conditions are within the discretion of the Committee as provided in the Plan. Further, the Committee shall make all other determinations and take or omit to take all other actions which may be necessary or advisable in the Committee’s sole discretion for the administration of the Plan. 3.3 Decisions Binding. All interpretations, determinations, actions and decisions made by the Committee pursuant to the provisions of the Plan and all related orders and resolutions of the Committee shall be final, conclusive, and binding on all individuals or entities, including the Company, Employees, Participants. (n) “Performance Goal” means one or more of the Company or individual goal or goals (whether quantitative or qualitative), which may be used singularly or in combination, as the Committee determines, to measure the performance of the Company and of individual Employees for the purpose of determining whether, and to what extent, an Award will be payable under the Plan for the Performance Period. The Performance Goals applicable to each Participant in the Plan during any Performance Period, may be, but they do not have to be, the same. (p) “Person ” means an individual, partnership, corporation, limited liability company, unincorporated organization, trust or joint venture, or a governmental agency or political subdivision thereof. (q) “Retirement” means, with respect to any Participant, when used in connection with the termination of a Participant’s employment, a voluntary resignation of employment by the Participant that occurs on or after the first date on which the Participant has (i) attained at least the age of 50, and when added to his number of years of continuous service with the Company or its Affiliates (including any period of salary continuation), his age and years of service equals or exceed 65 or (ii) the date on which the Participant attains age 65. 3.4 Delegation. The Committee may delegate to one or more of its members or to one or more officers of the Company, and/or its Subsidiaries and Affiliates, or to one or more agents or advisors such administrative duties or powers as it may deem advisable, and the Committee or any individuals to whom it has delegated duties or powers as aforesaid may employ one or more individuals to render advice with respect to any responsibility the Committee or such individuals may have under this Plan. The Committee may, by resolution, authorize one or more officers of the Company to do one or both of the following on the same basis as can the Committee: (a) designate Employees to be recipients of Awards; and (b) determine the size of any such Awards; provided, however, (i) the resolution providing such authorization sets forth the aggregate size of Awards such officer(s) may grant; and (ii) the officer(s) shall report periodically to the Committee regarding the nature and scope of the Awards granted pursuant to the authority delegated. Article 4. Eligibility and Participation 4.1 Eligibility. An employee must be actively employed and deemed to be in “good standing” (as determined by Committee or by officers of the Company to whom the Committee has delegated such authority) to be eligible to participate in the Plan. 4.2 Committee Discretion. The Committee retains sole and absolute discretion to determine which Employees shall participate in the Plan during a Performance Period. Article 5. Award Opportunity, Performance Goals, and Performance Period 5.1 Setting Award Opportunities. The Committee shall determine the duration of each Performance Period and set each Participant’s target Award opportunity with respect to a Performance Period. In addition, the Committee shall establish the Performance Goal(s) that must be achieved during a Performance Period for a Participant to earn and be paid his Award. 5.2 Earning Awards. Unless otherwise specified in an Other Compensation Program, Awards are based on a percentage of each Participant’s annual base salary for the Performance Period or such other criteria as the Committee may determine in its sole and absolute discretion. Subject to the terms of the Plan, an Award shall be earned by and paid to a Participant for a Performance Period based on the achievement of the Performance Goal or Performance Goals for such Performance Period or such other criteria as the Committee may determine in its sole and absolute discretion. The right to earn an Award by a Participant under the Plan shall not confer upon any other Participant or Employee or any future Participant or Employee a right to receive the same or similar benefits. 5.3 Form of Awards, Evidence of Awards and Timing of Payment of Awards. Subject to the approval of the Committee and unless otherwise set forth in an Other Compensation Program, payment of the Participant’s earned Award, if any, shall be made in cash, in a single lump sum. To receive payment of an Award, the Participant must have been continuously employed by the Company through the end of the Performance Period, and further through the actual payout date to receive any Award granted hereunder; provided, however, that in the discretion of the Committee or the Company’s Chief Executive Officer, Awards may be paid to Participants who have retired or to the designee or estate of a Participant who died during such Performance Period or prior to the actual payout date or to a Participant who has not been continuously employed by the Company through the end of the Performance Period, and further through the actual payout date. Notwithstanding the foregoing, there is no right of any Participant to receive any payment upon retirement, death or disability or other separation from employment, and such payment, if any, will be made at the sole discretion of the Committee or the Company’s Chief Executive Officer, as the case may be. Awards may be evidenced by an agreement in a form approved by the Committee. 5.4 Effect of Separation of Employment. Subject to the discretion of the Committee or the Company’s Chief Executive Officer as stated in Section 5.3 above, if the Participant is no longer employed prior to the actual payout date of any earned Award, then the Participant shall not be entitled to the payment of any Award hereunder. 5.5 Nontransferability. The right to receive payment of an Award hereunder may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated and any attempted sale, transfer, pledge, assignment, participation, or other alienation or hypothecation in violation of the foregoing shall be null and void. Further, except as otherwise determined by the Committee or set forth herein, a Participant’srights under the Plan shall be exercisable during the Participant’s lifetime only by the Participant or the Participant’s legal representative. Article 6. Employment and Participation 6.1 Employment. Nothing in the Plan shall interfere with or limit in any way the right of the Company to terminate any Participant’s employment at any time, nor confer upon any Participant any right to continue in the employ of the Company, nor be deemed a waiver or modification of any agreement between the Participant and the Company. 6.2 Participation. No Employee shall have the right to be selected to be paid an Award under this Plan, or, having been so selected, to be paid an Award at a future date. Article 7. Amendment and Termination 7.1 Amendment and Termination. The Committee may, at any time and from time to time, alter, modify, amend, suspend, or terminate the Plan in whole or in part. 7.2 Effect of Amendment or Termination. No alteration, modification, amendment, suspension or termination of the Plan may materially adversely effect any outstanding Award previously granted under the Plan without the prior written consent of the Participant holding such outstanding Award. Article 8. Tax Withholding The Company shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy federal, foreign, state, and local taxes, as required by law or regulation to be withheld with respect to any taxable event arising as a result of this Plan. Article 9. Successors All obligations of the Company under the Plan shall be binding on any successor to or assign of the Company, whether the existence of such successor or assign is the result of a direct or indirect purchase of, all or substantially of all of the business and/or assets of the Company, merger, consolidation, or otherwise, including a Change of Control. Article 10. Forfeiture Events 10.1 Committee Discretion. The Committee may determine that the Participant’s rights, payments, and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture, or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions of an Award. Such events may include, but shall not be limited to, separation of the Participant’s employment from the Company, termination of employment for cause, termination of the Participant’s provision of services to the Company, Affiliate, or subsidiary, violation of Company, Affiliate, or subsidiary policies, breach or violation of noncompetition, confidentiality, or other restrictive covenants that may apply to the Participant, or other conduct by the Participant that is detrimental to the business or reputation of the Company, any Affiliate, or subsidiary. 10.2 Clawback. Notwithstanding anything to the contrary contained herein, unless an Award agreement provides otherwise: (a) in the event of an accounting restatement due to material noncompliance by the Company with any financial reporting requirement under the securities laws, which 10.2 Clawback. Notwithstanding anything to the contrary contained herein, unless an Award agreement provides otherwise: (a) in the event of an accounting restatement due to material noncompliance by the Company with any financial reporting requirement under the securities laws, which reduces the amount payable or due in respect of an award under the Plan that would have been earned had the financial results been properly reported (as determined by the Committee) (i) the Award will be cancelled and (ii) the Participant will forfeit (A) the cash received or payable on the vesting, exercise or settlement of the Award and (B) the amount of the proceeds of the sale, gain or other value realized on the vesting or exercise of the Award acquired in respect of the Award (and the Participant may be required to return or pay such amount to the Corporation); (b) if, after a termination by a Participant from employment or services with the Company or its Affiliates, the Committee determines that the Company or any of its Affiliates had grounds to terminate such Participant for cause, then (i) any outstanding, vested or unvested, earned or unearned portion of an Award under the Plan that is held by such Participant may, at the Committee’s discretion, be canceled without payment therefor and (ii) the Committee, in its discretion, may require the Participant or other Person to whom any payment has been made or other property have been transferred in connection with the Award after the date of the conduct constituting cause, to forfeit and pay over to the Company, on demand, all or any portion of the compensation, gain or other value (whether or not taxable) realized on the vesting, payment or settlement of any other Award during the period following the date of the conduct constituting cause; or (c) to the extent required by applicable law (including without limitation the Sarbanes Oxley Act and Section 954 of the Dodd Frank Act) and/or the rules and regulations of any U.S. national securities exchange or inter-dealer quotation system on which shares of the Company’s common stock are listed or quoted, or if so required pursuant to a written policy adopted by the Company (as in effect and/or amended from time to time), Awards under the Plan shall be subject (including on a retroactive basis) to clawback, forfeiture or similar requirements (and such requirements shall be deemed incorporated by reference into this Plan and all outstanding award agreements). Article 11. Nature of the Plan A Participant has the status of a general unsecured creditor of the Company. Nothing contained herein shall be deemed to create a trust or fund of any kind or create any fiduciary relationship. The Plan is intended to be an unfunded arrangement for tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974, as amended. Article 12. Legal Construction 12.1 Gender and Number. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the plural. 12.2 Severability. In the event that any one or more of the provisions, subdivisions, words, clauses, phrases or sentences contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision, subdivision, word, clause, phrase or sentence in every other respect and of the remaining provisions, subdivisions, words, clauses, phrases or sentences hereof shall not in any way be impaired, it being intended that all rights, powers and privileges of the Company and Participants shall be enforceable to the fullest extent permitted by law. 12.3 Requirements of Law. The grant of Awards under the Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national will securities exchanges as may be required. 12.4 Governing Law. To the extent not preempted by federal law, the Plan and all agreements hereunder, shall be construed in accordance with and governed by the laws of the State of Delaware, without giving effect to the principles of conflicts of law. Article 13. Section 409A Awards granted pursuant to the Plan are intended to satisfy the requirements of Section 409A of the Code with respect to amounts subject thereto and shall be interpreted and construed in a manner consistent with that intent. If any provision of this Plan causes the Award not to satisfy the requirements of Section 409A of the Code, or could otherwise cause the Participant to recognize income or be subject to the interest and penalties under Section 409A of the Code, then the provision shall have no effect or, to the extent practicable, the Company may modify the provision to maintain the original intent without violating the requirements of Section 409A of the Code. EXHIBIT A Annual Management Bonus Plan (including the functional area plans) Customer Service Jackpot Corporate Staff Incentive Plan Pay For Results Total Return Project Renewal Incentive Plan Various host and sales incentive plans Exhibit A to Omnibus Incentive Plan Exhibit 12 CAESARS ENTERTAINMENT CORPORATION COMPUTATION OF RATIOS (Unaudited) (In millions, except ratio amounts) 1 Successor Predecessor Ratio of Earnings to Fixed Charges (g) 2012 (a) 2011 (b) 2010 (c) 2009 (d) Jan. 28, 2008 through Dec. 31, 2008 (e) Jan. 1, 2008 through Jan. 27, 2008 (f) (Loss)/income from continuing operations before income taxes $ (2,253.2 ) $ (1,232.8 ) $ (1,341.9 ) $ 2,431.3 $ (5,560.6 ) $ (127.6 ) Add: Fixed charges, excluding interest capitalized 2,162.5 2,179.6 2,035.9 1,929.4 2,113.8 93.2 Amortization of interest capitalized 8.5 8.6 8.9 5.4 1.9 0.5 Losses/(income) from equity in non-consolidated affiliates 17.5 7.9 1.5 2.2 2.1 (0.5 ) Non-controlling interests that have not incurred fixed charges 7.5 2.0 0.2 2.7 0.5 0.1 Distributed income from equity investees 1.0 1.9 1.7 2.2 2.5 0.1 Earnings/(losses) as defined $ (56.2 ) $ 967.2 $ 706.3 $ 4,373.2 $ (3,439.8 ) $ (34.2 ) Fixed charges: Interest expense, net of interest capitalized $ 2,101.3 $ 2,122.3 $ 1,981.6 $ 1,892.5 $ 2,074.9 $ 89.7 Interest capitalized 38.2 22.8 1.4 32.4 53.3 2.7 Interest included in rental expense 61.2 57.3 54.3 36.9 38.9 3.5 Total fixed charges $ 2,200.7 $ 2,202.4 $ 2,037.3 $ 1,961.8 $ 2,167.1 $ 95.9 Ratio of earnings to fixed charges (g) — — — 2.2 — — (a) The full year results of 2012 include $136.0 million in pre-tax gains on early extinguishments of debt, $1,067.7 million in pre-tax charges for impairments, and $106.2 million in net pre-tax charges for write-downs, reserves, and project opening costs, net of recoveries. (b) The full year results of 2011 include $47.9 million in pre-tax gains on early extinguishments of debt, $32.8 million in pre-tax charges for impairments, and $73.8 million in net pre-tax charges for write-downs, reserves, and project opening costs, net of recoveries. (c) The full year results of 2010 include $115.6 million in pre-tax gains on early extinguishments of debt, $184.0 million in pre-tax charges for impairments, and $149.7 million in net pre-tax charges for write-downs, reserves, and project opening costs, net of recoveries. (d) The full year results of 2009 include $4,965.5 million in pre-tax gains on early extinguishments of debt, $1,638.0 million in pre-tax charges for impairments, and $111.4 million in net pre-tax charges for write-downs, reserves, and project opening costs, net of recoveries. (e) The Successor period of 2008 includes $5,462.6 million in pre-tax charges for impairments, $742.1 million in pre-tax gains on early extinguishment of debt, $24.0 million in pre-tax charges related to the sale of the Company, and $45.1 million in net pre-tax charges for write-downs, reserves, and project opening costs, net of recoveries. (f) The Predecessor period of 2008 includes $5.4 million in net pre-tax charges for write-downs, reserves, and project opening costs, net of recoveries and $125.6 million in pre-tax charges related to the sale of the Company. (g) For purposes of computing this ratio, “earnings” consist of income before income taxes plus fixed charges (excluding capitalized interest), excluding equity in undistributed earnings of less-than- 50 %-owned investments. “Fixed charges” include interest whether expensed or capitalized, amortization of debt expense, discount or premium related to indebtedness and such portion of rental expense that we deem to be representative of interest. As required by the rules which govern the computation of this ratio, both earnings and fixed charges are adjusted where appropriate to include the financial results for the Company's nonconsolidated majority-owned subsidiaries. For the years ended December 31, 2012 , December 31, 2011 , December 31, 2010 , the Successor period from January 28, 2008 through December 31, 2008 , and the Predecessor period from January 1, 2008 through January 27, 2008 our earnings were insufficient to cover fixed charges by $2,256.9 million , $1,235.2 million , $1,331.0 million , $5,606.9 million , $130.1 million , respectively. Exhibit 14 CAESARS ENTERTAINMENT CORPORATION CODE OF BUSINESS CONDUCT AND ETHICS This Code of Business Conduct and Ethics (this “Code”) contains general guidelines for conducting the business of the company consistent with the highest standards of business ethics, and is intended to qualify as a "code of ethics" within the meaning of Section 406 of the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder and under the rules of the Nasdaq Stock Market. This Code applies to all of our directors, officers and employees. Our Chief Executive Officer and President, our Chief Operating Officer, our Chief Financial Officer, and our Chief Accounting Officer, are referred to as our "Principal Officers." This Code is designed to deter wrongdoing and to promote: • compliance with applicable governmental laws, rules and regulations; • accountability for adherence to the Code. The Code In order to achieve the purposes set forth above, we have adopted the following principles and policies: Conflicts of Interest . You must fully disclose to the General Counsel, or his or her designee, or if you do not feel comfortable reporting the conduct to the General Counsel, or his or her designee, or do not get a satisfactory response, to the Board of Directors, any situations, including situations involving immediate family members, that reasonably could be expected to give rise to a conflict of interest. A conflict of interest exists when your private interest, or the private interest of one of your family members, interferes, or appears to interfere, in any way with the interests of the company as a whole. The following are examples of situations (applicable to both you and your family member) that may present a conflict of interest: 1 • honest and ethical conduct, including ethical handling of actual or apparent conflicts of interest between personal and professional relationships; • full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with, or submit to, the United States Securities and Exchange Commission (the “SEC”) and in other public communications made by us; • prompt internal reporting to an appropriate person or persons identified in the Code of violations of the Code; and • employment by, service as a director of, or the provision of any services to, a company that is one of our material customers, suppliers or competitors, or a company whose interests could reasonably be expected to conflict with our interests; • receipt of personal benefits or favors (other than nominal benefits or favors) as a result of your position with the company; • a significant financial interest (ownership or otherwise) in any company that is one of our material customers, suppliers or competitors; and • any loan or guarantee of personal obligations from, or any other financial transaction with, any company that is one of our material customers, suppliers or competitors (other than loans from commercial lending institutions in the ordinary course of business). Corporate Opportunities . Any director, officer or employee that discovers a business opportunity that is in one of our lines of business must first present the business opportunity to our Board of Directors (in the case of a director or executive officer) or the General Counsel, or his or her designee (in the case of any other person), before pursuing the activity in his or her individual capacity. If the Board of Directors, or the General Counsel, or his or her designee, as the case may be, waives our right to pursue the opportunity, then you may do so in your individual capacity. Competition and Fair Dealing . All directors, officers and employees are obligated to deal fairly with our customers, suppliers and competitors. Our directors, officers, and employees will not take unfair advantage of any person or entity through manipulation, concealment, abuse of privileged information, misrepresentation or any other unfair dealing or practice. Company Records . Principal Officers should implement policies that will ensure that all company records are complete, accurate and reliable in all material respects. Company records include, but are not limited to, bookkeeping information, payroll, e-mails, accounting and financial data, measurement and performance records, electronic data files and all other records maintained in the ordinary course of our business. Directors, officers and employees are responsible for understanding and complying with our document retention policy. Please refer to our document retention policy for more information about company records. Accuracy of Financial Reports and other Public Communications . Our policy is, when required by rules of the SEC and Nasdaq and federal securities laws, to promptly disclose information that is accurate and complete in all material respects regarding our business, financial condition and results of operations. Materially inaccurate, incomplete or untimely reporting will not be tolerated and can severely damage the company and cause legal liability. Directors, officers and employees should be on guard for, and promptly report, evidence of improper financial reporting. Compliance with Laws and Regulations . Each director, officer, and employee has an obligation to comply with the laws of the cities, states and countries in which we operate. We will not tolerate any activity that violates any laws, rules or regulations applicable to us. This includes, without limitation, laws covering the gaming industry, commercial bribery and kickbacks, copyrights, trademarks and trade secrets, information privacy, insider trading, illegal political contributions, antitrust prohibitions, foreign corrupt practices, offering or receiving gratuities, environmental hazards, employment discrimination or harassment, occupational health and safety, false or misleading financial information or misuse of corporate assets. Compliance with Insider Trading Laws . Directors, officers and employees are strictly prohibited from trading in our stock or other securities, or the stock or other securities of any other company, while in possession of material, nonpublic information about the company or the other company. In addition, directors, officers and employees are strictly prohibited from recommending, "tipping" or suggesting that anyone else buy or sell our stock or other securities, or the stock or securities of any other company, on the basis of material, nonpublic information. For more information, please refer to our securities trading policy and procedures. Public Communications . Our policy is to provide timely, materially accurate and complete information in response to public requests (media, analysts, etc.), consistent with our obligations to maintain the confidentiality of competitive and proprietary information and to prevent selective disclosure of market-sensitive financial data. In connection with our public communications, we are required, and our policy is, to comply with Regulation FD (which stands for "fair disclosure") under the federal securities laws. For more information, please contact the Law Department. Principal Officers must be aware of the requirements of Regulation FD and must make every effort to ensure that our public disclosures comply with those requirements. 2 Reporting Violations of the Code Directors, officers, and employees have a duty to report any known or suspected violation of this Code, including any violation of laws, rules, regulations or policies applicable to us, to the General Counsel, or his or her designee. If the director, officer or employee does not feel comfortable reporting the conduct to the General Counsel, or his or her designee, or does not get a satisfactory response, he or she may contact any member of the Board of Directors. Any director, officer, or employee who violates this Code, or who fails to report a known or suspected violation of this Code, will be subject to appropriate discipline, including potential termination of employment, as determined by the Board of Directors based upon the facts and circumstances of each particular situation. All questions and reports of known or suspected violations of the law or this Code will be treated with sensitivity and discretion. We will protect the confidentiality of each director, officer and employee to the extent possible consistent with the law and our need to investigate each report. We strictly prohibit retaliation against a directors, officer or employee who, in good faith, seeks help or reports known or suspected violations. Waivers of the Code Each of the Board of Directors (in the case of a violation by a director or executive officer) and the General Counsel, or his or her designee (in the case of a violation by any other person) may, in its discretion, waive any violation of this Code. Any waiver for a director or an executive officer shall be disclosed as required by SEC and Nasdaq rules. Compliance Policy This Code is not intended to amend or replace the Company's Compliance Policy or any other company codes of conduct and the directors, officers and employees will be required to comply with the terms of this Code, the Compliance Policy and any other Company codes of conduct. Conclusion This Code contains general guidelines for conducting the business of the Company consistent with the highest standards of business ethics. Please contact the Law Department with any questions about these guidelines. Each director, officer and employee is separately responsible for his or her actions. If a director, officer or employee engages in conduct prohibited by the law or this Code, he or she will be deemed to have acted outside the scope of their employment. Such conduct will subject the director, officer or employee to disciplinary action, including possibly termination of employment. THIS CODE AND THE MATTERS ADDRESSED HEREIN ARE NEITHER A CONTRACT OF EMPLOYMENT NOR A GUARANTEE OF CONTINUING COMPANY POLICY. WE RESERVE THE RIGHT TO AMEND, SUPPLEMENT OR DISCONTINUE THIS CODE AND THE MATTERS ADDRESSED HEREIN, WITHOUT PRIOR NOTICE, AT ANY TIME. 3 Exhibit 21 CAESARS ENTERTAINMENT CORPORATION LIST OF SUBSIDIARIES As of March 1, 2013 Name Jurisdiction of Incorporation 190 Flamingo, LLC Nevada 2115-2121 Ontario Building, LLC 1 Ohio 250 Huron LLC 1 Ohio 3535 LV Corp. Nevada AJP Holdings, LLC Delaware AJP Parent, LLC Delaware Aster Insurance Ltd. Bermuda Atlantic City Country Club I, LLC New Jersey Atlantic City Express Service, LLC 2 New Jersey B I Gaming Corporation Nevada Bally's Midwest Casino, Inc. Delaware Bally's Park Place, Inc. New Jersey Baluma Cambio, S.A. Uruguay Baluma Holdings S.A. 3 Bahamas Baluma Ltda. Brazil Baluma S.A. Uruguay Benco, Inc. Nevada Biloxi Hammond, LLC Delaware Biloxi Village Walk Development, LLC Delaware BL Development Corp. Minnesota Boardwalk Regency Corporation New Jersey Brussels Casino S.A. Belgium Burlington Street Services Limited England/Wales CA Hospitality Holding Company, Ltd. British Virgin Islands Caesars Air, LLC Delaware Caesars Asia Limited Hong Kong Caesars Bahamas Investment Corporation Bahamas Caesars Bahamas Management Corporation Bahamas Caesars Baltimore Acquisition Company, LLC Delaware Caesars Baltimore Development Company, LLC Delaware Caesars Baltimore Investment Company, LLC Delaware Caesars Baltimore Management Company, LLC Delaware Caesars Canada Marketing Services Corporation Canada Caesars Casino Castilla La Mancha S.A .4 Spain Caesars Entertainment (U.K.) Ltd. United Kingdom Caesars Entertainment Akwesasne Consulting Corporation Nevada Caesars Entertainment Canada Holding, Inc. Nevada Name Jurisdiction of Incorporation Caesars Entertainment Development, LLC Nevada Caesars Entertainment Finance Corp. Nevada Caesars Entertainment Golf, Inc. Nevada Caesars Entertainment Operating Company, Inc. Delaware Caesars Entertainment Retail, Inc. Nevada Caesars Entertainment Windsor Limited Canada Caesars Escrow Corporation Delaware Caesars Europe Development, LLC Delaware Caesars Golf Macau Limited Macau Caesars Hotel Castilla La Mancha S.L. Spain Caesars India Sponsor Company, LLC Nevada Caesars Interactive Entertainment (Canada), Inc. Canada Caesars Interactive Entertainment (Hong Kong) Limited Hong Kong Caesars Interactive Entertainment (UK), Ltd. England/Wales Caesars Interactive Entertainment Israel Ltd. Israel Caesars Interactive Entertainment, Inc. 5 Delaware Caesars Korea Holding Company, LLC Delaware Caesars License Company, LLC Nevada Caesars Linq, LLC Delaware Caesars Marketing Services Corporation Nevada Caesars Massachusetts Acquisition Company, LLC Delaware Caesars Massachusetts Development Company, LLC Delaware Caesars Massachusetts Investment Company, LLC Delaware Caesars Massachusetts Management Company, LLC Delaware Caesars New Jersey, Inc. New Jersey Caesars Octavius, LLC Delaware Caesars Ohio Acquisition, LLC Delaware Caesars Ohio Investment, LLC Delaware Caesars Ontario Holding, Inc. Canada Caesars Operating Escrow LLC Delaware Caesars Palace Corporation Delaware Caesars Palace Realty Corporation Nevada Caesars Palace Sports Promotions, Inc. Nevada Caesars Riverboat Casino, LLC Indiana Caesars Spain Holdings Limited England/Wales Caesars Tournament, LLC Delaware Caesars Trex, Inc. Delaware Caesars United Kingdom, Inc. Nevada Caesars World International Corporation PTE, Ltd. Singapore Caesars World International Far East Limited Hong Kong Caesars World Marketing Corporation New Jersey Caesars World Merchandising, Inc. Nevada Caesars World, Inc. Florida California Clearing Corporation California Casanova Club Limited England/Wales Name Jurisdiction of Incorporation Casino Computer Programming, Inc. Indiana CBAC Gaming, LLC 6 Delaware CEI-Sullivan County Development Company Nevada CH Management Company, Ltd. Hong Kong Chester Downs and Marina LLC 7 Pennsylvania Chester Downs Finance Corp. Delaware Chester Facility Holding Company, LLC Delaware Christian County Land Acquisition Company, LLC Delaware Cinderlane, Inc. Nevada Consolidated Supplies, Services and Systems Nevada Corby Leisure Retail Development Limited England/Wales Corner Investment Company, LLC Nevada Corner Investment Holdings, LLC Delaware Corner Investment Propco, LLC Delaware CR Baltimore Holdings, LLC 8 Delaware Creator Capital Limited 9 Bermuda Culembourg Metropole Casino (Pty) Limited South Africa CZL Development Company, LLC Delaware CZL Investment Company, LLC Delaware CZL Management Company, LLC Delaware Dagger Holdings Limited England/Wales DCH Exchange, LLC Nevada DCH Lender, LLC Nevada Delta One Holdings, LLC Nevada Delta Two Holdings, LLC Nevada Des Plaines Development Limited Partnership 10 Delaware Desert Palace, Inc. Nevada Double Deuce Studios, LLC Delaware Durante Holdings, LLC Nevada East Beach Development Corporation Mississippi Emerald Safari Resort (Pty) Limited 11 South Africa FHR Corporation Nevada Flamingo CMBS Manager, LLC Nevada Flamingo Las Vegas Holding, LLC Nevada Flamingo Las Vegas Mezz 1, LLC Delaware Flamingo Las Vegas Mezz 2, LLC Delaware Flamingo Las Vegas Mezz 3, LLC Delaware Flamingo Las Vegas Mezz 4 LLC Delaware Flamingo Las Vegas Mezz 5, LLC Delaware Flamingo Las Vegas Mezz 6, LLC Delaware Flamingo Las Vegas Mezz 7 LLC Delaware Flamingo Las Vegas Mezz 8, LLC Delaware Flamingo Las Vegas Mezz 9, LLC Delaware Flamingo Las Vegas Operating Company, LLC Nevada Flamingo Las Vegas Propco, LLC Delaware Name Jurisdiction of Incorporation Flamingo-Laughlin, Inc. Nevada GB Investor, LLC Delaware GCA Acquisition Subsidiary, Inc. Minnesota GNOC, Corp. New Jersey Golden Nugget Club Limited England/Wales Grand Casinos of Biloxi, LLC Minnesota Grand Casinos of Mississippi, LLC Gulfport Mississippi Grand Casinos, Inc. Minnesota Grand Media Buying, Inc. Minnesota HAC CMBS Manager, LLC New Jersey Harrah South Shore Corporation California Harrah's (Barbados) SRL Barbados Harrah's Activity Limited England/Wales Harrah's Alabama Corporation Nevada Harrah's Arizona Corporation Nevada Harrah's Atlantic City Holding, Inc. New Jersey Harrah's Atlantic City Mezz 1, LLC Delaware Harrah's Atlantic City Mezz 2, LLC Delaware Harrah's Atlantic City Mezz 3, LLC Delaware Harrah's Atlantic City Mezz 4, LLC Delaware Harrah's Atlantic City Mezz 5, LLC Delaware Harrah's Atlantic City Mezz 6, LLC Delaware Harrah's Atlantic City Mezz 7, LLC Delaware Harrah's Atlantic City Mezz 8, LLC Delaware Harrah's Atlantic City Mezz 9, LLC Delaware Harrah's Atlantic City Operating Company, LLC New Jersey Harrah's Atlantic City Propco, LLC Delaware Harrah's BC, Inc. Delaware Harrah's Bossier City Investment Company, LLC Louisiana Harrah's Bossier City Management Company, LLC Nevada Harrah's Chester Downs Investment Company, LLC Delaware Harrah's Chester Downs Management Company, LLC Nevada Harrah's Entertainment Limited England/Wales Harrah's Illinois Corporation Nevada Harrah's Interactive Investment Company Nevada Harrah's International C.V . The Netherlands Harrah's International Holding Company, Inc. Delaware Harrah's Investments, Inc. Nevada Harrah's Iowa Arena Management, LLC Delaware Harrah's Kansas Casino Corporation Nevada Harrah's Las Vegas Mezz 1, LLC Delaware Harrah's Las Vegas Mezz 2, LLC Delaware Harrah's Las Vegas Mezz 3, LLC Delaware Harrah's Las Vegas Mezz 4, LLC Delaware Harrah's Las Vegas Mezz 5, LLC Delaware Name Jurisdiction of Incorporation Harrah's Las Vegas Mezz 6, LLC Delaware Harrah's Las Vegas Mezz 7, LLC Delaware Harrah's Las Vegas Mezz 8, LLC Delaware Harrah's Las Vegas Mezz 9, LLC Delaware Harrah's Las Vegas Propco, LLC Delaware Harrah's Las Vegas, LLC Nevada Harrah's Laughlin Mezz 1, LLC Delaware Harrah's Laughlin Mezz 2, LLC Delaware Harrah's Laughlin Mezz 3, LLC Delaware Harrah's Laughlin Mezz 4, LLC Delaware Harrah's Laughlin Mezz 5, LLC Delaware Harrah's Laughlin Mezz 6, LLC Delaware Harrah's Laughlin Mezz 7, LLC Delaware Harrah's Laughlin Mezz 8, LLC Delaware Harrah's Laughlin Mezz 9, LLC Delaware Harrah's Laughlin Propco, LLC Delaware Harrah's Laughlin, LLC Nevada Harrah's Management Company Nevada Harrah's Maryland Heights Operating Company Nevada Harrah's MH Project, LLC Delaware Harrah's NC Casino Company, LLC North Carolina Harrah's New Orleans Management Company Nevada Harrah's North Kansas City LLC Missouri Harrah's Nova Scotia ULC Nova Scotia Harrah's Operating Company Memphis, LLC Delaware Harrah's Pittsburgh Management Company Nevada Harrah's PL Lender, LLC Delaware Harrah's Reno Holding Company, Inc. Nevada Harrah's Shreveport Investment Company, LLC Nevada Harrah's Shreveport Management Company, LLC Nevada Harrah's Shreveport/Bossier City Holding Company, LLC Delaware Harrah's Shreveport/Bossier City Investment Company, LLC Delaware Harrah's Southwest Michigan Casino Corporation Nevada Harrah's Sumner Investment Company, LLC Delaware Harrah's Sumner Management Company, LLC Delaware Harrah's Travel, Inc. Nevada Harrah's West Warwick Gaming Company, LLC Delaware Harveys BR Management Company, Inc. Nevada Harveys C.C. Management Company, Inc. Nevada Harveys Iowa Management Company, Inc. Nevada Harveys Tahoe Management Company, Inc. Nevada H-BAY, LLC Nevada HBR Realty Company, Inc. Nevada Name Jurisdiction of Incorporation HCAL, LLC Nevada HCR Services Company, Inc. Nevada HEI Holding C.V. The Netherlands HEI Holding Company One, Inc. Nevada HEI Holding Company Two, Inc. Nevada HET International 1 B.V. The Netherlands HET International 2 B.V. The Netherlands HHLV Management Company, LLC Nevada HIE Holdings Topco, Inc. Delaware HIE Holdings, Inc. Delaware HLV CMBS Manager, LLC Nevada Hole in the Wall, LLC Nevada Horseshoe Cincinnati Management, LLC Delaware Horseshoe Cleveland Management, LLC Delaware Horseshoe Entertainment Louisiana Horseshoe Gaming Holding, LLC Delaware Horseshoe GP, LLC Nevada Horseshoe Hammond, LLC Indiana Horseshoe Ohio Development, LLC Delaware Horseshoe PL Acquisition Co., LLC Delaware Horseshoe PL Development Company, LLC Delaware Horseshoe PL GP, LLC Delaware Horseshoe PL LP, LLC Delaware Horseshoe PL Management Company, LLC Delaware Horseshoe Shreveport, L.L.C. Louisiana HTM Holding, Inc. Nevada Inter Casino Management (Egypt) Limited Isle of Man Jazz Casino Company, LLC Louisiana JCC Fulton Development, LLC Louisiana JCC Holding Company II LLC Delaware Koval Holdings Company, LLC Delaware Koval Investment Company, LLC Nevada LAD Hotel Partners, LLC 12 Louisiana Las Vegas Golf Management, LLC Nevada Las Vegas Resort Development, Inc. Nevada Laughlin CMBS Manager, LLC Nevada LCI (Overseas) Investments Pty Ltd. South Africa LCI plc England/Wales Lifeboat, Inc. Louisiana London Clubs (Europe) Limited England/Wales London Clubs (Overseas) Limited England/Wales London Clubs Brighton Limited England/Wales London Clubs Glasgow Limited Scotland London Clubs Holdings Limited England/Wales London Clubs International Limited England/Wales Name Jurisdiction of Incorporation London Clubs Leeds Limited England/Wales London Clubs Limited England/Wales London Clubs LSQ Limited England/Wales London Clubs Management Limited England/Wales London Clubs Manchester Limited England/Wales London Clubs Nottingham Limited England/Wales London Clubs Poker Room Limited England/Wales London Clubs South Africa Limited England/Wales London Clubs Southend Limited England/Wales London Clubs Trustee Limited England/Wales LVH Corporation Nevada MP Flamingo, LLC 13 Nevada Macau Orient Investment Limited Macau Martial Development Corporation New Jersey NAL Ohio Holdings, LLC Michigan Nevada Marketing, LLC Nevada New Gaming Capital Partnership Nevada Ocean Showboat, Inc. New Jersey Octavius Linq Holding Co., LLC Delaware Outoi Investment Company Limited Macau Parball Corporation Nevada Paris CMBS Manager, LLC Nevada Paris Las Vegas Holding, LLC Nevada Paris Las Vegas Mezz 1, LLC Delaware Paris Las Vegas Mezz 2, LLC Delaware Paris Las Vegas Mezz 3, LLC Delaware Paris Las Vegas Mezz 4, LLC Delaware Paris Las Vegas Mezz 5, LLC Delaware Paris Las Vegas Mezz 6, LLC Delaware Paris Las Vegas Mezz 7, LLC Delaware Paris Las Vegas Mezz 8, LLC Delaware Paris Las Vegas Mezz 9, LLC Delaware Paris Las Vegas Operating Company, LLC Nevada Paris Las Vegas Propco, LLC Delaware Park Place Finance, ULC Nova Scotia PHW Investments, LLC Delaware PHW Las Vegas, LLC Nevada PHW Manager, LLC Nevada Playboy Club (London) Limited England/Wales Players Bluegrass Downs, Inc. Kentucky Players Development, Inc. Nevada Players Holding, LLC Nevada Players International, LLC Nevada Players LC, LLC Nevada Players Maryland Heights Nevada, LLC Nevada Name Jurisdiction of Incorporation Players Resources, Inc. Nevada Players Riverboat II, LLC Louisiana Players Riverboat Management, LLC Nevada Players Riverboat, LLC Nevada Players Services, Inc. New Jersey Playtika Bel, LLC Belarus Playtika Ukraine, LLC Ukraine Playtika, Ltd. Israel R Casino Limited England/Wales R Club (London) Limited England/Wales Reno Crossroads, LLC Delaware Reno Projects, Inc. Nevada RGFD, LLC 1 Michigan Rio CMBS Manager, LLC Nevada Rio Development Company, Inc. Nevada Rio Mezz 1, LLC Delaware Rio Mezz 2, LLC Delaware Rio Mezz 3, LLC Delaware Rio Mezz 4, LLC Delaware Rio Mezz 5, LLC Delaware Rio Mezz 6, LLC Delaware Rio Mezz 7, LLC Delaware Rio Mezz 8, LLC Delaware Rio Mezz 9, LLC Delaware Rio Propco, LLC Delaware Rio Properties, LLC Nevada Rio Property Holding, LLC Nevada Robinson Property Group Corp. Mississippi ROC Finance 1 Corp. 1 Delaware ROC Finance, LLC 1 Delaware Rock Gaming Cleveland Scranton Peninsula, LLC 1 Delaware Rock Ohio Caesars Chase, LLC 1 Delaware Rock Ohio Caesars Cincinnati, LLC 1 Delaware Rock Ohio Caesars Cleveland, LLC 1 Delaware Rock Ohio Caesars Gateway, LLC 1 Delaware Rock Ohio Caesars Hotel, LLC 1 Delaware Rock Ohio Caesars, LLC 14 Delaware Rock Parent, LLC 1 Delaware Roman Entertainment Corporation of Indiana Indiana Roman Holding Corporation of Indiana Indiana Romulus Risk and Insurance Company, Inc. Nevada Showboat Atlantic City Mezz 1, LLC Delaware Showboat Atlantic City Mezz 2, LLC Delaware Showboat Atlantic City Mezz 3, LLC Delaware Name Jurisdiction of Incorporation Showboat Atlantic City Mezz 4, LLC Delaware Showboat Atlantic City Mezz 5, LLC Delaware Showboat Atlantic City Mezz 6, LLC Delaware Showboat Atlantic City Mezz 7, LLC Delaware Showboat Atlantic City Mezz 8, LLC Delaware Showboat Atlantic City Mezz 9, LLC Delaware Showboat Atlantic City Operating Company, LLC New Jersey Showboat Atlantic City Propco, LLC Delaware Showboat Holding, Inc. Nevada Showboat Nova Scotia ULC Nova Scotia Southern Illinois Riverboat/Casino Cruises, Inc. Illinois Sterling Suffolk Racecourse, LLC 15 Massachusetts Tahoe Garage Propco, LLC Delaware Tele/Info, Inc. Nevada The Caesars Foundation Nevada The Sportsman Club Limited England/Wales Thistledown Management, LLC Delaware Thistledown Racetrack, LLC Delaware TRB Flamingo, LLC Nevada Trigger Real Estate Corporation Nevada TSP Owner, LLC Delaware Tunica Roadhouse Corporation Delaware Turfway Park, LLC 16 Delaware Twain Avenue, Inc. Nevada VFC Development Corporation British Virgin Islands Village Walk Construction, LLC Delaware VLO Development Corporation British Virgin Islands Windsor Casino Limited Canada Windsor Casino Supplies Limited Canada Winnick Holdings, LLC Delaware Winnick Parent, LLC Delaware 1 Subsidiary under Rock Ohio Caesars, LLC 2 33.33% Boardwalk Regency Corporation; 33.33% Harrah's Atlantic City Holding, Inc.; 33.33% non-affiliate 3 11.46% B I Gaming Corporation; 83.77% Harrah's International Holding Company, Inc.; 4.77% third party shareholders 4 60% Harrah's Entertainment Limited.; 40% non-affiliate 5 89.59 % HIE Holdings, Inc.; 10.41% third party shareholders 6 88.6 % CR Baltimore Holdings, LLC ; 11.4% non-affiliates 7 99.5% Harrah's Chester Downs Investment Company, LLC ; 0.5% third party shareholders 8 58.51% Caesars Baltimore Investment Company, LLC; 41.49% non-affiliate 9 7.5% Harrah's Interactive Investment Company; 92.5% non-affiliate 10 80% Harrah's Illinois Corporation ; 20% non-affiliate 11 70% LCI (Overseas) Investments Pty Ltd.; 30% non-affiliate 12 49% Harrah's Bossier City Investment Company, LLC; 51% non-affiliate 13 50% Flamingo Las Vegas Operating Company, LLC; 50% non-affiliate 14 20% Caesars Ohio Investment Company, LLC; 80% non-affiliate 15 4.2% Caesars Massachusetts Investment Company, LLC; 95.8% non-affiliate 16 90% Rock Ohio Caesars, LLC; 10% non-affiliate Exhibit 23 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the incorporation by reference in Registration Statement No. 333-182385 on Form S-8 and Registration Statement Nos. 333-180115 and 333-180116 on Form S-3 of Caesars Entertainment Corporation of our reports dated March 15, 2013, relating to the consolidated financial statements and consolidated financial statement schedules of Caesars Entertainment Corporation and the effectiveness of Caesars Entertainment Corporation's internal control over financial reporting, appearing in the Annual Report on Form 10-K of Caesars Entertainment Corporation for the year ended December 31, 2012. Las Vegas, Nevada March 15, 2013 Exhibit 31.1 I, Gary W. Loveman, certify that: 1. I have reviewed this annual report on Form 10-K of Caesars Entertainment Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 15, 2013 By: / S / G ARY W. L OVEMAN Gary W. Loveman Chairman of the Board, Chief Executive Officer, and President Exhibit 31.2 I, Donald A. Colvin certify that: 1. I have reviewed this annual report on Form 10-K of Caesars Entertainment Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 15, 2013 By: / S / DONALD A. COLVIN Donald A. Colvin Executive Vice President and Chief Financial Officer Exhibit 32.1 Certification of Principal Executive Officer Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Caesars Entertainment Corporation (the “Company”), hereby certifies, to such officer's knowledge, that: (i) the accompanying Annual Report on Form 10-K of the Company for the year ended December 31, 2012 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: March 15, 2013 The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. § 1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing. / S / G ARY W. L OVEMAN Gary W. Loveman Chairman of the Board, Chief Executive Officer, and President Exhibit 32.2 Certification of Principal Financial Officer Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Caesars Entertainment Corporation (the “Company”), hereby certifies, to such officer's knowledge, that: (i) the accompanying Annual Report on Form 10-K of the Company for the year ended December 31, 2012 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: March 15, 2013 The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. § 1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing. / S / DONALD A. COLVIN Donald A. Colvin Executive Vice President and Chief Financial Officer Exhibit 99.1 Supplemental Discussion of Caesars Entertainment Operating Company, Inc. Financial Information On January 28, 2008, Caesars Entertainment Corporation ("Caesars Entertainment" or "Caesars") was acquired by affiliates of Apollo Global Management, LLC and TPG Capital, LP in an all-cash transaction (the “Acquisition”). A substantial portion of the financing of the Acquisition is comprised of bank and bond financing obtained by Caesars Entertainment Operating Company, Inc. (for purposes of this Exhibit, “CEOC,” the “Company,” “we,” “our,” or “us,” and including our subsidiaries when the context requires), a wholly-owned subsidiary of Caesars Entertainment. This financing is neither secured nor guaranteed by Caesars Entertainment's other wholly-owned subsidiaries, including certain subsidiaries that own properties that are secured under $4,664.1 million face value of commercial mortgage-backed securities (“CMBS”) financing. Therefore, we believe it is meaningful to provide information pertaining solely to the consolidated financial position and results of operations of CEOC and its subsidiaries. Subsequent to the filing of our annual report on Form 10-K for the year ended December 31, 2011, including Exhibit 99.1 thereto, we identified a deferred tax liability reversal related to the recognition of cancellation of indebtedness income ("COD") in 2009. We have determined that on a CEOC "stand-alone" basis, a COD recognition event did not occur and the deferred tax liability should not have been reversed. At December 31, 2012, this deferred tax liability was restored to CEOC resulting in an increase to deferred tax liabilities, and a decrease to stockholders' equity. There are no cash impacts as a result of this correction. OPERATING RESULTS FOR CEOC Overall CEOC Results The following tables represent CEOC's unaudited Consolidated Condensed Balance Sheets as of December 31, 2012 and 2011 and its unaudited Consolidated Condensed Statements of Operations and unaudited Consolidated Condensed Statements of Cash Flows for the years ended December 31, 2012 and 2011 . On November 2, 2012, we sold the Harrah's St. Louis casino. In addition, in the fourth quarter of 2012, we began discussions with interested investors on a sale of the subsidiaries that hold our land concession in Macau (the "Macau Subsidiaries"). As a result, the assets and liabilities of the Macau Subsidiaries are classified as held for sale as of December 31, 2012, and the results of operations of Harrah's Maryland Heights, LLC, owner of the Harrah's St. Louis casino, and the Macau Subsidiaries are classified as discontinued operations for the year ended December 31, 2012. The Consolidated Condensed Balance Sheet as of December 31, 2011 has been revised to reflect the assets and liabilities of the Harrah's St. Louis casino and the Macau Subsidiaries as held for sale, and the Consolidated Condensed Statement of Operations for the year then ended has been revised to reflect their results of operations as discontinued operations. 1 Caesars Entertainment Operating Company, Inc. Consolidated Condensed Balance Sheets (Unaudited) (In millions) 2 As of December 31, 2012 2011 Assets Current assets Cash and cash equivalents $ 1,547.5 $ 596.6 Restricted cash 793.2 39.9 Receivables, net of allowance for doubtful accounts of $168.7 and $167.8 533.5 430.6 Deferred income taxes 94.0 156.1 Prepayments and other current assets 92.2 102.7 Inventories 38.8 34.0 Assets held for sale 5.1 15.5 Total current assets 3,104.3 1,375.4 Property and equipment, net of accumulated depreciation of $2,346.9 and $1,933.0 10,776.5 11,479.9 Goodwill 1,403.7 1,619.2 Intangible assets other than goodwill 3,362.3 3,705.8 Investments in and advances to non-consolidated affiliates 101.0 90.2 Restricted cash 307.4 377.1 Deferred charges and other 528.5 532.4 Assets held for sale 471.2 1,177.7 $ 20,054.9 $ 20,357.7 Liabilities and Stockholder's Deficit Current liabilities Accounts payable $ 325.2 $ 256.7 Interest payable 236.0 193.1 Accrued expenses 769.3 742.6 Current portion of long-term debt 876.3 40.4 Liabilities held for sale 3.8 13.5 Total current liabilities 2,210.6 1,246.3 Long-term debt 16,731.3 15,591.0 Notes payable to affiliate 516.4 322.1 Deferred credits and other 777.9 870.6 Deferred income taxes 2,724.6 3,394.6 Liabilities held for sale 52.1 66.3 23,012.9 21,490.9 Total CEOC stockholder's deficit (3,000.2 ) (1,175.2 ) Non-controlling interests 42.2 42.0 Total deficit (2,958.0 ) (1,133.2 ) $ 20,054.9 $ 20,357.7 Caesars Entertainment Operating Company, Inc. Consolidated Condensed Statements of Operations (Unaudited) (In millions) 3 Year Ended December 31, 2012 2011 Revenues Casino $ 5,054.2 $ 5,165.5 Food and beverage 1,004.6 1,007.1 Rooms 759.5 739.8 Management fees 47.3 35.8 Other 513.0 470.2 Less: casino promotional allowances (898.7 ) (875.6 ) Net revenues 6,479.9 6,542.8 Operating expenses Direct Casino 2,935.2 2,974.1 Food and beverage 411.9 415.8 Rooms 176.4 170.4 Property, general, administrative, and other 1,423.1 1,484.8 Depreciation and amortization 555.0 521.7 Write-downs, reserves, and project opening costs, net of recoveries 80.4 69.7 Intangible and tangible asset impairment charges 1,064.7 32.8 Loss on interests in non-consolidated affiliates 18.9 6.9 Corporate expense 157.8 120.9 Acquisition and integration costs 5.8 3.5 Amortization of intangible assets 105.7 97.1 Total operating expenses 6,934.9 5,897.7 (Loss)/income from operations (455.0 ) 645.1 Interest expense, net of interest capitalized (2,016.2 ) (2,030.9 ) Other income, including interest income 23.1 24.1 Loss from continuing operations before income taxes (2,448.1 ) (1,361.7 ) Benefit for income taxes 934.6 561.3 Loss from continuing operations, net of income taxes (1,513.5 ) (800.4 ) Discontinued operations (Loss)/income from discontinued operations (59.4 ) 59.2 Provision for income taxes (50.1 ) (27.8 ) (Loss)/income from discontinued operations, net of income taxes (109.5 ) 31.4 Net loss (1,623.0 ) (769.0 ) Less: net income attributable to non-controlling interests (4.4 ) (10.4 ) Net loss attributable to CEOC $ (1,627.4 ) $ (779.4 ) Caesars Entertainment Operating Company, Inc. Consolidated Condensed Statements of Cash Flows (Unaudited) (In millions) 4 Year Ended December 31, 2012 2011 Cash flows used in operating activities $ (343.0 ) $ (298.5 ) Cash flows from investing activities Acquisitions of property and equipment, net of change in related payables (443.5 ) (238.2 ) Change in restricted cash (683.6 ) (417.0 ) Payments to acquire certain gaming rights — (22.7 ) Advances to non-consolidated affiliates and other (28.1 ) (76.0 ) Proceeds from the sale of a subsidiary 42.4 — Other 11.7 (3.6 ) Cash flows used in investing activities (1,101.1 ) (757.5 ) Cash flows from financing activities Proceeds from the issuance of long-term debt 3,661.7 863.8 Debt issuance costs and fees (50.6 ) (18.1 ) Borrowings under lending agreements 453.0 358.0 Repayments under lending agreements (608.0 ) (203.0 ) Cash paid for early extinguishments of debt (1,804.3 ) (17.5 ) Scheduled debt retirements (15.8 ) (43.7 ) Purchase of additional interests in subsidiary (9.6 ) — Intercompany note borrowings, net of repayments 194.3 63.4 Other (17.8 ) (8.1 ) Cash flows provided by financing activities 1,802.9 994.8 Cash flows from discontinued operations Cash flows from operating activities (16.9 ) 62.8 Cash flows from investing activities 600.3 (10.7 ) Cash flows from financing activities — — Net cash provided by discontinued operations 583.4 52.1 Net increase/(decrease) in cash and cash equivalents 942.2 (9.1 ) Change in cash classified as assets held for sale 8.7 2.5 Cash and cash equivalents, beginning of period 596.6 603.2 Cash and cash equivalents, end of period $ 1,547.5 $ 596.6 REGIONAL AGGREGATION The executive officers of our company review operating results, assess performance, and make decisions related to the allocation of resources on a property-by-property basis. We believe, therefore, that each property is an operating segment and that it is appropriate to aggregate and present the operations of our company as one reportable segment. To provide more meaningful information than would be possible on a consolidated basis, our casino properties (as of December 31, 2012 or otherwise noted below) have been grouped into seven regions as shown in the table below to facilitate discussion of our operating results. ____________________ 5 Las Vegas Atlantic City Louisiana/Mississippi Iowa/Missouri Caesars Palace Showboat Atlantic City Harrah's New Orleans Harrah's North Kansas City Bally's Las Vegas Bally's Atlantic City Harrah's Louisiana Downs Harrah's Council Bluffs The Quad Resort & Casino (a) Caesars Atlantic City Horseshoe Bossier City Horseshoe Council Bluffs/ Bill’s Gamblin’ Hall & Harrah's Philadelphia (b) Grand Biloxi Bluffs Run Saloon Harrah's Tunica Planet Hollywood Resort & Horseshoe Tunica Casino Tunica Roadhouse Hotel & Casino Illinois/Indiana Other Nevada Managed and International Horseshoe Southern Indiana Harrah's Reno Harrah's Ak-Chin (d) Harrah's Joliet (c) Harrah's Lake Tahoe Harrah's Cherokee (d) Harrah's Metropolis Harveys Lake Tahoe Harrah's Rincon (d) Horseshoe Hammond Horseshoe Cleveland (e) Conrad Punta del Este (f) Caesars Windsor (g) London Clubs International (h) (a) Prior to December 2012, this property operated under the name Imperial Palace Hotel and Casino. (b) Prior to May 2012, this property operated under the Harrah's Chester name. We have a 99.5% ownership interest in and manage this property. (c) We have an 80% ownership interest in and manage this property. (d) Managed. (e) We manage this property and have a 20% interest in Rock Ohio Caesars, LLC, which owns this property. (f) We have an approximate 95% ownership interest in and manage this property. In November 2012, we entered into a definitive agreement with Enjoy to sell 45% of Baluma S.A., our subsidiary that owns and operates Conrad. Under the terms of the agreement, we will have an approximate 52% ownership in this property. (g) We operate this property and the province of Ontario owns the complex through the Ontario Lottery and Gaming Corporation. (h) As of December 31, 2012, w e owned, operated, or managed 10 casino clubs in the provinces of the United Kingdom and two in Egypt. On March 4, 2013, we closed one of the casino clubs in the United Kingdom. We also have a 70% ownership interest in and manage one casino in South Africa. CONSOLIDATED OPERATING RESULTS Net revenues, (loss)/income from operations, and loss from continuing operations, net of income taxes for all periods presented in the table above exclude the results of the Harrah's St. Louis casino and the results of the subsidiaries that hold our land concession in Macau, both of which are presented as discontinued operations. ____________________ * Operating margin is calculated as (loss)/income from operations divided by net revenues. ** Not meaningful. Year ended December 31, 2012 compared to year ended December 31, 2011 CEOC's net revenues for 2012 decreased $62.9 million or 1.0% from 2011 , due mainly to revenue declines in the Atlantic City Region resulting from hurricane-related property closures, continued competitive pressures in that region and casino revenue declines in several other U.S. regions. All four properties in the Atlantic City Region had closures during the fourth quarter 2012 due to Hurricane Sandy, which made landfall on October 29, 2012. Harrah's Philadelphia reopened two days later and the Atlantic City properties reopened five days later. However, the region's economy has been slow to recover due to the devastation caused by the hurricane. We estimate that the negative impact of Hurricane Sandy on net revenues was approximately $30 million to $35 million . Net revenue declines were partially offset by higher revenues in the Las Vegas Region due in part to the January 2012 opening of the Octavius Tower at Caesars Palace Las Vegas and from Caesars' management companies as a result of the opening of Horseshoe Cleveland earlier this year. For 2012 , loss from operations was $455.0 million compared with income from operations of $645.1 million in 2011 . This change was due largely to non-cash impairment charges that totaled $1,064.7 million , comprised of intangible asset impairment charges of $195.2 million related to goodwill, $206.0 million related to trademarks and $33.0 million related to gaming rights, as well as tangible asset impairment charges of $450.0 million related to the tangible assets of one of the properties in the Atlantic City Region and $180.5 million related to a previously halted development project in Biloxi, Mississippi. By comparison, non-cash intangible and tangible asset impairment charges were $32.8 million in 2011. Also contributing to the loss from operations in 2012 was an increase in depreciation expense associated with the opening of the Octavius Tower at Caesars Palace Las Vegas in January 2012 and increased corporate expenses. Net loss attributable to CEOC for 2012 increased $848.0 million , or 108.8% , from 2011 due mainly to the change in loss from operations described above and a net loss from our discontinued operations of $109.5 million , partially offset by a decrease in interest expense, net of interest capitalized and an increase in the tax rate benefit as further described in "Other Factors Affecting Net Income" that follows herein. Performance Metrics We measure performance in part through the tracking of trips by rated customers, which means a customer whose gaming activity is tracked through the Total Rewards customer-loyalty system ("trips"), and by spend per rated customer trip ("spend per trip"). A trip is created by a Total Rewards card holder engaging in one or more of the following activities while at one of CEOC's properties: (1) hotel stay, (2) gaming activity, or (3) a comp redemption, which means the receipt of a complimentary item given out by CEOC's casinos. In markets where we have multiple properties, customers often engage in trip generating activities at more than one property in a day. In these instances, we consider the market as a whole and do not count multiple trips. Customer spend means the cumulative rated theoretical spend (which is the amount of money expected to be retained by the casino based upon the mathematics underlying the particular game as a fraction of the amount of money wagered by the customer) across all game types for a specific customer. For the Atlantic City region, we refer to customers that stay at a hotel in one of its properties as lodgers and customers that may play at a casino located in one of its properties but do not stay at a hotel at such property as non-lodgers. 6 (Dollars in millions) 2012 2011 Percent Favorable/ (Unfavorable) Casino revenues $ 5,054.2 $ 5,165.5 (2.2 )% Net revenues 6,479.9 6,542.8 (1.0 )% (Loss)/income from operations (455.0 ) 645.1 ** Loss from continuing operations, net of income taxes (1,513.5 ) (800.4 ) (89.1 )% (Loss)/income from discontinued operations, net of income taxes (109.5 ) 31.4 ** Net loss attributable to CEOC (1,627.4 ) (779.4 ) (108.8 )% Operating margin* (7.0 )% 9.9 % (16.9) pts The following table reflects the percentage increase/(decrease) in trips and spend per trip for the U.S. regions for 2012 compared with 2011 . For 2012 , trips decreased 4.4% on a consolidated CEOC basis compared with 2011 due to hurricane-related property closures and competitive pressures in the Atlantic City Region, as well as modest declines in the rest of our domestic regions. For 2012 , spend per trip increased 2.0% from 2011 , due mainly to a 10.0% increase in the Las Vegas region, largely as a result of strength in the international high-end segment. On a consolidated CEOC basis, cash average daily room rates for 2012 were relatively unchanged from 2011 as declines in the Atlantic City Region as a result of lost convention business in the fourth quarter 2012 due to the hurricane were offset by increases in our Las Vegas, Iowa/Missouri and Louisiana/Mississippi regions. Total occupancy percentages in 2012 decreased 0.8 percentage points from 2011 , due to a 3.6% decline in the Atlantic City Region, offset by increases in the Illinois/Indiana and Louisiana/Mississippi regions. REGIONAL OPERATING RESULTS Las Vegas Region ____________________ * Operating margin is calculated as income from operations divided by net revenues. Net revenues for 2012 increased $39.8 million , or 2.5% , from 2011 , due primarily to strength in the international, high-end gaming segment contributing to higher casino revenues and the January 2012 opening of 662 additional rooms in the Octavius Tower at Caesars Palace Las Vegas contributing to higher rooms revenue. Revenues were negatively impacted by Project Linq construction activities in 2012, which included the closure of O'Shea's casino and the ongoing renovation of The Quad Resort & Casino (formerly, the Imperial Palace Hotel and Casino). We estimate that Project Linq construction activities reduced net revenues by approximately $13 million to $17 million . Trips decreased by 0.8% in 2012 from 2011 while spend per trip increased 10.0% . In 2012 , hotel revenues increased 4.3% and cash average daily room rates increased 1.1% from 2011 , both largely attributable to the opening of Octavius Tower at Caesars Palace Las Vegas. Occupancy rates decreased 2.6 percentage points compared with 2011 . Income from operations decreased $50.1 million , or 18.5% , from 2011, due primarily to an increase in property operating expenses and depreciation expense associated with the Octavius Tower at Caesars Palace Las Vegas, an increase in bad debt expense, and an increase in write-downs, reserves and project opening costs, net of recoveries related primarily to increased remediation costs in the region. We estimate that the impact caused by Project Linq construction activities reduced 2012 income from operations by approximately $8 million to $13 million . 7 Trips Spend per Trip Consolidated CEOC (4.4 )% 2.0 % Las Vegas region (0.8 )% 10.0 % Atlantic City region: Lodgers (11.4 )% 1.3 % Non-lodgers (8.1 )% (0.6 )% All other regions (2.7 )% (0.3 )% (Dollars in millions) 2012 2011 Percent Favorable/ (Unfavorable) Casino revenues $ 916.5 $ 850.3 7.8 % Net revenues 1,641.2 1,601.4 2.5 % Income from operations 220.5 270.6 (18.5 )% Operating margin* 13.4 % 16.9 % (3.5) pts During 2012, we secured $185.0 million in financing to fund the complete renovation of Bill’s Gamblin’ Hall & Saloon into a boutique lifestyle hotel that includes a dayclub/nightclub. The renovation will include a complete remodeling of the guest rooms, casino floor, and common areas, the addition of a second floor restaurant, and the construction of an approximately 65,000 square foot rooftop pool and dayclub/nightclub. We will own the property and manage the casino, hotel, and food and beverage operations, and the dayclub/nightclub will be leased to a third party. Bill's Gamblin' Hall & Saloon temporarily closed in early February 2013 to accommodate these renovations. The renovated hotel, casino, and restaurant are expected to open in December 2013 and the dayclub/nightclub is expected to open in April 2014 . Through December 31, 2012, $3.0 million had been spent on this project. During 2011, we commenced construction on Project Linq, a dining, entertainment, and retail development between the Flamingo casino and The Quad Resort & Casino, on the east side of the Las Vegas Strip, which is scheduled to open in phases beginning in late 2013. Project Linq also includes the construction of a 550-foot observation wheel, the High Roller, which is expected to open in early 2014. Through December 31, 2012, $240.6 million had been spent on this project, of which $187.9 million was spent in 2012. Atlantic City Region ____________________ * Operating margin is calculated as (loss)/income from operations divided by net revenues. ** Not meaningful. For 2012, net revenues decreased $130.1 million , or 9.5% , from 2011 due mainly to continued competitive pressures and the negative impact of Hurricane Sandy which forced the closure of our properties in Atlantic City for five days and our property in Philadelphia for two days in the fourth quarter 2012. The hurricane related property closures contributed to an 8.5% decline in trips during 2012 compared with 2011 and spend per trip declined slightly. We estimate that the negative impact of Hurricane Sandy on net revenues was approximately $30 million to $35 million . Loss from operations was $426.8 million for 2012 compared with income from operations of $49.4 million in 2011 . There has been growing competitive and economic pressure in Atlantic City due to new competition in surrounding markets, exacerbated by significant hurricane-related closures in 2012 and 2011 . The collective effect of these trends has resulted in downward pressure on the Company's actual results from operations compared with prior years and with previous forecasts. As a result, the Company continues to evaluate its options for participation in the market. In connection with that evaluation, the Company determined it was necessary to complete an assessment for impairment for one of its Atlantic City properties. Upon the failure of step one of the assessment, we performed a fair value assessment of the property. As a result of this assessment, in December 2012, we recorded a tangible asset impairment of $450.0 million related to the property. There was no comparable charge in 2011 . Also contributing to the loss from operations in 2012 was the earnings impact of lower revenues and we estimate that the negative impact of Hurricane Sandy on loss from operations was approximately $25 million to $30 million . We expect that the region will continue to be challenged as a result of the slow recovery from the hurricane and competitive pressures. 8 (Dollars in millions) 2012 2011 Percent Favorable/ (Unfavorable) Casino revenues $ 1,083.0 $ 1,209.5 (10.5 )% Net revenues 1,239.1 1,369.2 (9.5 )% (Loss)/income from operations (426.8 ) 49.4 ** Operating margin* (34.4 )% 3.6 % (38.0) pts Louisiana/Mississippi Region ____________________ * Operating margin is calculated as (loss)/income from operations divided by net revenues. ** Not meaningful. Net revenues in the region for 2012 were down slightly from 2011 , due mainly to increased competitive pressures from new competition in Biloxi, Mississippi beginning in May 2012 and Baton Rouge, Louisiana beginning in September 2012, as well as the negative impact from Hurricane Isaac in the third quarter 2012. Spend per trip in the region increased while trips to the region's properties declined. Loss from operations was $222.3 million in 2012 , compared with income from operations of $122.0 million in 2011 . This change was due mainly to non-cash impairment charges during 2012 of $334.7 million , comprised of intangible asset impairment charges of $153.2 million related to goodwill, $1.0 million related to gaming rights and tangible asset impairment charges of $180.5 million related to a halted development project in Biloxi, Mississippi. We also recorded a non-cash charge of $20.2 million in 2012 related to exit activities associated with the halted project. Iowa/Missouri Region The following results for all periods exclude Harrah's St. Louis which has been classified as a discontinued operation as a result of the sale of this property in 2012. ____________________ * Operating margin is calculated as income from operations divided by net revenues. Net revenues during 2012 decreased $6.9 million , or 1.5% , from 2011 , due to declines in casino revenues. Spend per trip increased while trips to the properties in the region declined, primarily as a result of the new competition in the Kansas City market beginning in the first quarter 2012. However, income from operations increased for 2012 from 2011 due mainly to reduced property operating expenses resulting from cost-savings initiatives. Illinois/Indiana Region ____________________ * Operating margin is calculated as income from operations divided by net revenues. 9 (Dollars in millions) 2012 2011 Percent Favorable/ (Unfavorable) Casino revenues $ 999.7 $ 1,012.0 (1.2 )% Net revenues 1,101.9 1,104.4 (0.2 )% (Loss)/income from operations (222.3 ) 122.0 ** Operating margin* (20.2 )% 11.0 % (31.2) pts (Dollars in millions) 2012 2011 Percent Favorable/ (Unfavorable) Casino revenues $ 428.0 $ 435.7 (1.8 )% Net revenues 459.8 466.7 (1.5 )% Income from operations 123.1 105.6 16.6 % Operating margin* 26.8 % 22.6 % 4.2 pts (Dollars in millions) 2012 2011 Percent Favorable/ (Unfavorable) Casino revenues $ 1,001.3 $ 1,010.9 (0.9 )% Net revenues 1,050.4 1,059.5 (0.9 )% Income from operations 156.0 145.8 7.0 % Operating margin* 14.9 % 13.8 % 1.1 pts Net revenues in 2012 decreased $9.1 million , or 0.9% from 2011 due primarily to a slight decline in casino revenues. Also in the fourth-quarter 2011 we recognized revenues of $7.4 million related to the receipt of business interruption insurance proceeds for lost profits caused by property closures earlier that year due to flooding, with no comparable amounts received in 2012. These declines were partially offset by a $6.8 million decrease in promotional allowances. Trips were down year over year, due in part to continued competitive pressures in the region, despite the reopening earlier this year of the bridge that allows direct access by customers to the Company’s Southern Indiana property, which closed in September 2011. Spend per trip was also down. However, income from operations for 2012 increased from 2011, due mainly to reduced property operating expenses as a result of cost-savings initiatives. Other Nevada Region ____________________ * Operating margin is calculated as (loss)/income from operations divided by net revenues. ** Not meaningful. Net revenues in 2012 decreased $14.2 million , or 4.6% , from 2011 due largely to a decline in casino revenues resulting from the challenging competitive environment in the region during the year. Trips and spend per trip declined in 2012 compared with 2011. Loss from operations in 2012 was $45.4 million compared with income from operations of $28.2 million . This change was due mainly to non-cash intangible asset impairment charges of $74.0 million recorded in 2012, primarily comprised of $42.0 million related to goodwill and $32.0 million related to gaming rights. Managed, International and Other The Managed region includes companies that operate three Indian-owned casinos, as well as Horseshoe Cleveland, which opened in May 2012 and Caesars Windsor, and the results of Thistledown Racetrack ("Thistledown") through August 2012 when the racetrack was contributed to Rock Ohio Caesars, LLC, a venture in which we hold a 20% ownership interest. Subsequent to August 2012, the Managed region includes the results of the subsidiary that will manage Thistledown once it commences video lottery terminal operations, which is expected to occur in the second quarter 2013. The International region includes the results of our international operations. The Other region is comprised of corporate expenses, including administrative, marketing, and development costs, and income from certain non-consolidated affiliates. 10 (Dollars in millions) 2012 2011 Percent Favorable/ (Unfavorable) Casino revenues $ 215.0 $ 228.4 (5.9 )% Net revenues 292.0 306.2 (4.6 )% (Loss)/income from operations (45.4 ) 28.2 ** Operating margin* (15.5 )% 9.2 % (24.7) pts In the fourth quarter 2012, we began discussions with interested investors on a sale of the subsidiaries that hold our land concession in Macau. As a result of this plan of disposal, the assets and liabilities have been classified as held for sale at December 31, 2012 and 2011 and their operating results have been classified as discontinued operations for all periods presented and are excluded from the table below. For 2012, net revenues increased $60.1 million , or 9.5% , from 2011 due mainly to increased revenues from the new managed casino, Horseshoe Cleveland, which opened in May 2012, including an increase in reimbursable expenses for Horseshoe Cleveland that is presented on a gross revenue basis, resulting in an increase in net revenues and an equally offsetting increase in operating expenses. Loss from operations increased $183.6 million from 2011 , due mainly to non-cash intangible asset impairment charges of $206.0 million related to trademarks, compared with non-cash intangible and tangible asset impairments of $29.8 million in 2011. Also contributing to the higher loss from operations are increases in corporate expense of $36.9 million resulting from the consolidation of certain functions at corporate and increased pension accruals, partially offset by the income impact of increased revenues and a decrease of $36.9 million in write-downs, reserves, and project opening costs, net of recoveries related to lower efficiency project costs. OTHER FACTORS AFFECTING NET INCOME ____________________ * Not meaningful Interest Expense, Net of Interest Capitalized Interest expense, net of interest capitalized, decreased $14.7 million in 2012 , from 2011 . During 2011, we recorded a $183.2 million charge to interest expense as a result of our determination that our interest rate swap agreements no longer qualified as hedging instruments for accounting purposes. Excluding the impact of this 2011 charge, interest expense increased in 2012 by $168.5 million, as a result of higher interest rates and debt balances in 2012 compared with 2011. Interest expense for 2012 included $29.6 million of gains due to changes in fair value for derivatives not designated as hedging instruments. Interest expense is reported net of interest capitalized of $37.8 million and $22.7 million for 2012 and 2011 , respectively. Interest capitalized in 2012 is primarily related to Project Linq while interest capitalized in 2011 was related to the completion of the Octavius Tower at Caesars Palace Las Vegas. 11 (Dollars in millions) 2012 2011 Percent Favorable/ (Unfavorable) Net revenues Managed $ 89.5 $ 48.1 86.1 % International 461.3 458.6 0.6 % Other 144.7 128.7 12.4 % Total net revenues $ 695.5 $ 635.4 9.5 % Income/(loss) from operations Managed $ 7.0 $ 6.0 16.7 % International 37.4 54.9 (31.9 )% Other (304.5 ) (137.4 ) (121.6 )% Total loss from operations $ (260.1 ) $ (76.5 ) (240.0 )% Expense/(Income) (Dollars in millions) 2012 2011 Percent Favorable/ (Unfavorable) Interest expense, net of interest capitalized $ 2,016.2 $ 2,030.9 0.7 % Benefit for income taxes (934.6 ) (561.3 ) 66.5 % Loss/(income) from discontinued operations, net of income taxes 109.5 (31.4 ) * Tax Rate Benefit The full-year effective tax rate benefit for 2012 and 2011 was 38.2% and 41.2% , respectively. The year-over-year decrease in the effective tax rate benefit was, primarily, due to (i) nondeductible goodwill impairments in 2012, (ii) a decrease in the tax benefit from foreign operations in 2012 mostly related to the effect of providing deferred taxes on unremitted earnings from foreign subsidiaries in Uruguay that are no longer permanently reinvested, (iii) a decrease in state deferred tax benefits recognized in 2012 relative to 2011 mostly as a result of a state restructuring completed in 2011, and (iv) deferred tax benefits recognized in 2011 from a correction of the deferred tax liabilities, which were partially offset by tax benefits recognized in 2012 from the decrease of uncertain tax positions relating to the settlement of a foreign matter and our IRS examinations. Under the American Recovery and Reinvestment Act of 2009, or the ARRA, we received temporary federal tax relief under the Delayed Recognition of Cancellation of Debt Income, or CODI, rules. The ARRA contains a provision that allowed for a deferral for tax purposes of CODI for debt reacquired in 2009 and 2010, following by recognition of CODI ratably from 2014 to 2018. In connection with the debt that we reacquired in 2009 and 2010, we deferred related CODI of $3.5 billion for tax purposes (net of Original Issue Discount ("OID") interest expense, some of which must also be deferred to 2014 through 2018 under the ARRA). We are required to include one-fifth of the deferred CODI, net of deferred and regularly scheduled OID, in taxable income each year from 2014 through 2018. For state income tax purposes, certain states have conformed to the Act and others have not. In March 2013, we made a “Check-the-Box” election for one of our foreign entities to treat that entity as a partnership for U.S. federal income tax purposes effective at the end of December 2012. As a result of the election, the foreign entity will be deemed to completely liquidate for U.S. federal income tax purposes. The deemed liquidation will produce a capital loss for federal income tax purposes that will be used to offset capital gains resulting from the 2012 sale of our Harrah's St. Louis casino. We estimate that the utilization of the capital loss will result in a federal income tax benefit of approximately $105 million in first quarter 2013 with a corresponding increase to our net operating loss deferred tax asset. Loss/(income) from discontinued operations, net of income taxes Loss from discontinued operations, net of income taxes for 2012 was $109.5 million compared with income from discontinued operations, net of income taxes of $31.4 million in 2011. This change was due mainly to a $101.0 million non-cash impairment charge recorded in 2012 related to the Company's land concession in Macau and $63.9 million of income taxes related to the sale of the Harrah's St. Louis casino. LIQUIDITY AND CAPITAL RESOURCES Cost Savings Initiatives Caesars Entertainment has undertaken comprehensive cost-reduction efforts to rightsize expenses with business levels through its implementation of "Project Renewal," an initiative designed to reinvent certain aspects of Caesars' functional and operating units to gain significant further cost reductions and streamline its operations. As part of Project Renewal, Caesars implemented a shared-services organization that enables more efficient decision making and sharing of best practices. Caesars believes this organization provides it with a permanently lower cost structure and benefits from a greater concentration of specified talent and quicker decision making. In accordance with our shared services agreement with Caesars Entertainment, we estimate that Project Renewal and other cost-savings programs produced $ 133.6 million in incremental cost savings for the year ended December 31, 2012 compared with 2011 . Additionally, as of December 31, 2012 , we expect that these and additional new cost-savings programs will produce additional annual cost savings of $ 152.2 million , based on the full implementation of current projects that are in process. As Caesars realizes savings or identifies new cost-reduction activities, this amount will change. 12 Capital Spending and Development We incur capital expenditures in the normal course of business, and we perform ongoing refurbishment and maintenance at our existing casino entertainment facilities, to maintain our quality standards. We also continue to pursue development and acquisition opportunities for additional casino entertainment and other hospitality facilities that meet our strategic and return on investment criteria. Cash used for capital expenditures in the normal course of business is typically made available from cash flows generated by our operating activities and established debt programs, while cash used for development projects, including projects currently under development as well as additional projects being pursued, is typically funded from established debt programs, specific project financing, and additional debt offerings. As a result of the sale of the Harrah's St. Louis casino, the Company has been using and will continue to use the net proceeds from the sale to fund capital expenditures. Proceeds not used for capital expenditures are required to be used to purchase term loans under the senior secured credit facilities (the “Credit Facilities”). These proceeds are reflected in our Consolidated Condensed Statements of Cash Flows as cash inflows related to investing activities of discontinued operations. Our planned development projects, if they proceed, will require, individually and in the aggregate, significant capital commitments and, if completed, may result in significant additional revenues. The commitment of capital, the timing of completion, and the commencement of operations of development projects are contingent upon, among other things, negotiation of final agreements and receipt of approvals from the appropriate political and regulatory bodies. We must also comply with covenants and restrictions set forth in our debt agreements. Our capital spending for the year ended December 31, 2012 totaled $443.5 million , net of an increase of $ 47.2 million of related payables. Estimated total capital expenditures for 2013 , including 2013 expenditures associated with Project Linq, the Bill's renovation, and other developments for which we expect to obtain financing, are expected to be between $1,075.0 million and $1,140.0 million which includes approximately $300 million of 2013 project financing associated with Project Linq, the Bill's renovation, and other developments for which we expect to obtain financing. Liquidity and Capital Resources Our cash and cash equivalents, excluding restricted cash, totaled $ 1,547.5 million at December 31, 2012 compared to $596.6 million at December 31, 2011 . Restricted cash totaled $ 1,100.6 million at December 31, 2012 , the current portion of which includes the $750.0 million of proceeds from our December 2012 debt offering that were placed into escrow until February 20, 2013, when escrow conditions were satisfied. Nearly all of the remaining restricted cash consists of cash reserved under loan agreements for development projects and certain expenditures incurred in the normal course of business, such as interest service, real estate taxes, property insurance, and capital improvements. Our operating cash inflows are typically used for operating expenses, debt service costs, working capital needs, and capital expenditures in the normal course of business. Our cash flows from operating, investing, and financing activities for the twelve months ended December 31, 2012 and 2011 associated with the Harrah's St. Louis casino and the subsidiaries that hold our land concession in Macau, which are defined as discontinued operations, are included in our Consolidated Condensed Statements of Cash Flows as cash flows from discontinued operations. We sold the Harrah's St. Louis casino on November 2, 2012, and the net proceeds generated from the sale are being used will continue to be used to fund capital expenditures. Proceeds not used for capital expenditures are required to be used to purchase term loans under the Credit Facilities. We are a highly leveraged company and a significant amount of our liquidity needs are for debt service. As of December 31, 2012 , we had $ 18,124.0 million book value of indebtedness outstanding, including capital lease indebtedness. This amount includes the December 2012 debt offering of $750.0 million which is classified as current in our Consolidated Condensed Balance Sheet at December 31, 2012 due to escrow conditions not being satisfied until February 20, 2013. Cash paid for interest for the year ended December 31, 2012 was $1,683.8 million. Payments of short-term debt obligations, other than the $750.0 million described above, and payments of other commitments, are expected to be made from operating cash flows and from borrowings under our established debt programs. Long-term obligations are expected to be paid through operating cash flows, refinancing of debt, or, if necessary, additional debt or equity offerings. In addition to cash flows from operations, available sources of cash include amounts available under our current revolving credit facility. At December 31, 2012 , our additional borrowing capacity under the credit facility was $317.7 million . In recent years, we have not been generating sufficient operating cash flows to fund our investing activities, requiring us to fund our investments with additional financing. Our ability to fund our operations and pay our debt and debt service obligations depends, in part, upon economic and other factors that are beyond our control, and disruptions in capital markets and restrictive covenants related to our existing debt could impact our ability to secure additional funds through financing activities. 13 From time to time, depending upon market, pricing, and other conditions, as well as on our cash balances and liquidity, we may seek to acquire notes or other indebtedness of the Company through open market purchases, privately negotiated transactions, tender offers, redemption or otherwise, upon such terms and at such prices as we may determine (or as may be provided for in the indentures governing the notes), for cash or other consideration. In addition, we have considered and will continue to evaluate potential transactions to reduce net debt, such as debt for debt exchanges and other transactions. There can be no assurance as to which, if any, of these alternatives or combinations thereof we may choose to pursue in the future as the pursuit of any alternative will depend upon numerous factors such as market conditions, our financial performance, and the limitations applicable to such transactions under our financing documents. Please refer to the CEOC Bond Offerings and Credit Facilities sections below, as well as the Capital Resources section that follows herein for details on our debt outstanding. This detail includes, among other things, a table presenting details on our individual borrowings outstanding as of December 31, 2012 and 2011, changes in our debt outstanding and certain changes in the terms of existing debt for the year ended December 31, 2012 . The Capital Resources section that follows herein also includes details on interest and fees and discusses the use of interest rate swap and interest rate cap derivatives to manage the mix of our debt between fixed and variable rate instruments. The Debt Covenant Compliance section below details restrictive covenants related to certain of our borrowings. CEOC Bond Offerings In February 2012, CEOC completed the offering of $1,250.0 million aggregate principal amount of 8.5% senior secured notes due 2020. CEOC used $1,095.6 million of the net proceeds from this transaction to repay a portion of the Credit Facilities in connection with the consummation of the transactions as further described under the Credit Facilities section below. In August 2012, CEOC completed the offering of $750.0 million aggregate principal amount of 9% senior secured notes due 2020. CEOC used $478.8 million of the net proceeds from this transaction to repay a portion of the Credit Facilities in connection with the consummation of the transactions as further described under the Credit Facilities section below. In December 2012, CEOC completed the offering of $750.0 million aggregate principal amount of 9% senior secured notes due 2020, the proceeds of which were placed into escrow. Upon release from escrow, we will use the net proceeds from this offering to pay related fees and expenses and for general corporate purposes, which may include capital expenditures and the repayment, redemption, retirement or repurchase in the open market of a portion of our outstanding indebtedness. In addition, we intend to retire or refinance approximately $350 million of our outstanding indebtedness, based on prevailing prices and market and other considerations existing at the time. On February 20, 2013, the escrow conditions were satisfied. In February 2013 , CEOC completed the offering of $1,500.0 million aggregate principal amount of 9% senior secured notes due 2020 (the " February 2013 notes"), the proceeds of which were placed into escrow. Upon release from escrow, we plan to use the net proceeds of the February 2013 notes offering to repay a portion of CEOC's existing term loans at par, with such repayment being applied: first, to all outstanding B-1 , B-2 , and B-3 term loans held by consenting lenders; second, to B-5 and B-6 term loans held by consenting lenders, in an amount up to 20% of the principal amount of the B-5 and B-6 term loans; and third, if any proceeds remain outstanding, to outstanding term loans as CEOC elects in its discretion, and to pay related fees and expenses. In connection with the February 2013 notes offering, CEOC received the requisite lenders’ consents and entered into a bank amendment to its Credit Facilities to, among other things: (i) use the net cash proceeds of February 2013 notes offering to repay a portion of CEOC’s existing term loans as described above; (ii) obtain up to $75.0 million of extended revolving facility commitments with a maturity of January 28, 2017 , (iii) increase the accordion capacity under the Credit Facilities by an additional $650.0 million (which may be used, among other things, to establish extended revolving facility commitments under the Credit Facilities); (iv) modify the calculation of the senior secured leverage ratio for purposes of the maintenance test under the Credit Facilities to exclude the February 2013 notes; and (v) modify certain other provisions of the Credit Facilities. The effectiveness of this proposed bank amendment and related transactions are subject to regulatory approval and other conditions. Credit Facilities In connection with the Acquisition, we entered into the Credit Facilities. This financing is neither secured nor guaranteed by Caesars Entertainment’s other direct subsidiaries. 14 In May 2011 , we amended our Credit Facilities to, among other things: (i) allow us to buy back loans from individual lenders at negotiated prices at any time, which may be less than par, (ii) allow us to extend the maturity of term loans or revolving commitments, as applicable, and for us to otherwise modify the terms of loans or revolving commitments in connection with such an extension, and (iii) modify certain other provisions of the Credit Facilities. We also extended our Credit Facilities by (i) converting $799.4 million of B-1, B-2 and B-3 term loans held by consenting lenders to B-5 term loans with an extended maturity date of January 28, 2018 and a higher interest rate with respect to such extended term loans (the "Extended Term Loans") and (ii) converting $423.3 million of revolver commitments held by consenting lenders into Extended Term Loans. During 2012, we (i) extended the maturity of $3,812.3 million B-1, B-2 and B-3 term loans held by consenting lenders from January 28, 2015 to January 28, 2018 and increased the interest rate with respect to such extended term loans (the “Term B-6 Loans”), (ii) converted $457.8 million original maturity revolver commitments held by consenting lenders to Term B-6 Loans and promptly following such conversion, repaid $1,574.3 million of Term B-6 Loans held by any consenting lender, (iii) extended the maturity of $37.2 million original maturity revolver commitments held by consenting lenders who elected not to convert their commitments to term loans from January 28, 2014 to January 28, 2017 and increased the interest rate and the undrawn commitment fee with respect to such extended revolver commitments, and upon the effectiveness of such extension, terminated $798.5 million of revolver commitments and increased the amount of outstanding Term B-6 Loans by $2,853.8 million , and (iv) modified certain other provisions of the Credit Facilities. The Term B-6 Loans have a springing maturity to April 14, 2017 if more than $250.0 million of CEOC's 11.25% senior secured notes due 2017 remain outstanding on April 14, 2017. In addition to the foregoing, we may elect to extend and/or convert additional term loans and/or revolver commitments from time to time. As of December 31, 2012 , our Credit Facilities provide for senior secured financing of up to $6,480.6 million , consisting of (i) senior secured term loan facilities in an aggregate principal amount of $6,072.3 million with $1,025.8 million maturing on January 28, 2015, $970.0 million maturing on October 31, 2016 (the "Incremental Loans"), and $4,076.5 million maturing on January 28, 2018 , (ii) a senior secured revolving credit facility in an aggregate principal amount of up to $408.3 million , with $377.2 million maturing January 28, 2014, and $31.1 million maturing January 28, 2017, including both a letter of credit sub-facility and a swingline loan sub-facility. The term loans under the Credit Facilities require scheduled quarterly payments of $3.1 million , with the balance due at maturity. As of December 31, 2012 , $90.6 million of the revolving credit facility is committed to outstanding letters of credit. After consideration of the letter of credit commitments, $317.7 million of additional borrowing capacity was available to the us under our revolving credit facility as of December 31, 2012 . The following table summarizes the annual maturities of the face value of our long-term debt as of December 31, 2012 . ____________________ Subsequent to December 31, 2012, we consummated additional extension transactions with consenting lenders under our Credit Facilities and amended our Credit Facilities as follows: In January and February 2013, CEOC converted $267.8 million aggregate principal amount of original maturity revolver commitments held by consenting lenders to Term B-6 Loans, repaid $133.9 million principal amount of term loans of extending lenders, terminated $267.8 million principal amount of revolving commitments of extending lenders, and increased the amount of outstanding Term B-6 Loans by $133.9 million . In February 2013, we amended our Credit Facilities in connection with the February 2013 notes offering discussed in the CEOC Bond Offerings section above. 15 (In millions) 2013 (2) 2014 2015 2016 2017 Thereafter Total Actual (1) $ 901.5 $ 23.7 $ 2,601.0 $ 2,034.2 $ 3,642.6 $ 11,842.3 $ 21,045.3 (1) Maturities assume our exercise of the extension option of the PWH Las Vegas senior secured loan to 2015 . (2) Includes the note offering that occurred in December 2012 . Although the notes mature in 2020 , $750.0 million face value notes offered in December 2012 are classified as short-term obligations within our December 31, 2012 balance sheet because the escrow conditions were not met as of that date. Other Financing Transactions In February 2012 , Chester Downs issued $330.0 million aggregate principal amount of 9.25% senior secured notes due 2020 through a private placement. Chester Downs used $232.4 million of the proceeds of the notes to repay the term loan due 2016 plus accrued interest and a prepayment penalty. The remaining proceeds were used to make a distribution to Chester Downs' managing member, Harrah's Chester Downs Investment Company, LLC, a wholly-owned subsidiary of CEOC, and for other general corporate purposes. Debt Covenant Compliance The Credit Facilities require compliance on a quarterly basis with a maximum net senior secured first lien debt leverage test. In addition, the Credit Facilities include negative covenants, subject to certain exceptions, restricting or limiting our ability and the ability of our restricted subsidiaries to, among other things: (i) incur additional debt; (ii) create liens on certain assets; (iii) enter into sale and lease-back transactions; (iv) make certain investments, loans, and advances; (v) consolidate, merge, sell, or otherwise dispose of all or any part of its assets or to purchase, lease, or otherwise acquire all or any substantial part of assets of any other person; (vi) pay dividends or make distributions or make other restricted payments; (vii) enter into certain transactions with its affiliates; (viii) engage in any business other than the business activity conducted at the closing date of the loan or business activities incidental or related thereto; (ix) amend or modify the articles or certificate of incorporation, by-laws, and certain agreements or make certain payments or modifications of indebtedness; and (x) designate or permit the designation of any indebtedness as “Designated Senior Debt.” Caesars Entertainment is not bound by any financial or negative covenants contained in our credit agreement, other than with respect to the incurrence of liens on and the pledge of its stock of CEOC. All borrowings under the senior secured revolving credit facility are subject to the satisfaction of customary conditions, including the absence of a default, the accuracy of representations and warranties, and the requirement that such borrowing does not reduce the amount of obligations otherwise permitted to be secured under our Credit Facilities without ratably securing the retained notes. Certain of our borrowings have covenants and requirements that include, among other things, the maintenance of specific levels of financial ratios. Failure to comply with these covenants can result in limiting our long-term growth prospects by hindering our ability to incur future indebtedness or grow through acquisitions, or cause an event of default. Specifically, our Credit Facilities require us to maintain a senior secured leverage ratio of no more than 4.75 to 1.0 , which is the ratio of senior first priority secured debt to last twelve months ("LTM") Adjusted EBITDA - Pro Forma - CEOC Restricted. This ratio excludes $2,200.0 million of first priority senior secured notes and up to $350.0 million aggregate principal amount of consolidated debt of subsidiaries that are not wholly owned. This ratio also reduces the amount of senior first priority secured debt by the amount of unrestricted cash on hand. As of December 31, 2012 , our senior secured leverage ratio was 4.44 to 1.0 . In February 2013, we amended our Credit Facilities to, among other things, modify the calculation of the senior secured leverage ratio for purposes of the maintenance test under the Credit Facilities to additionally exclude the $1,500.0 million February 2013 notes as described in the CEOC Bond Offerings section above. The effectiveness of this proposed Credit Facility amendment and related transactions are subject to certain conditions, including required regulatory approvals. Once effective, we expect this amendment will provide us with additional flexibility under our senior secured leverage ratio. We are in compliance with our Credit Facilities and indentures, including the senior secured leverage ratio, as of December 31, 2012 . In order to comply with the quarterly senior secured leverage ratio in the future we will need to achieve a certain amount of LTM Adjusted EBITDA - Pro-Forma - CEOC Restricted and/or reduce levels of total senior secured net debt (total senior secured debt less unrestricted cash). The factors that could impact the foregoing include (a) changes in gaming trips, spend per trip and hotel metrics, which are correlated to a consumer recovery, (b) ability to effect cost-savings initiatives, (c) asset sales, (d) issuing additional second lien or unsecured debt, or project financing, (e) equity financings, (f) delays in development project spending or (g) a combination thereof. In addition, under certain circumstances, our Credit Facilities allow us to apply cash contributions received as an increase to LTM Adjusted EBITDA - Pro-Forma - CEOC Restricted if we are unable to meet our senior secured leverage ratio. However, there is no guarantee that such contributions will be forthcoming. 16 Based upon the Company's current operating forecast, as well as our ability to achieve one or more of the factors noted above, and assuming the effectiveness of the Credit Facility amendment discussed above, we believe that we will continue to be in compliance with the senior secured leverage ratio and meet our cash flow needs during the foreseeable future, including the next twelve months. If we are unable to maintain compliance with the senior secured leverage ratio and we fail to remedy a default pursuant to the terms of our Credit Facilities, there would be an “event of default” under the senior secured credit agreement. We cannot assure you that our business will generate sufficient cash flows from operations, that we will be successful in sales of assets, or that future borrowings will be available to us, to fund our liquidity needs and pay our indebtedness when due. If we are unable to meet our liquidity needs or pay our indebtedness when it is due, we may be required to further reduce expenses, sell additional assets, or attempt to restructure our debt. Any such actions could negatively impact our competitive position and revenue generation. In addition, we have pledged a significant portion of our assets as collateral under certain of our debt agreements and, if any of those lenders accelerate the repayment of borrowings, there can be no assurance that we will have sufficient assets to repay our indebtedness. In addition, certain covenants contained in our Credit Facilities and indentures covering our second priority senior secured notes and first priority senior secured notes restrict our ability to take certain actions such as incurring additional debt or making acquisitions if we are unable to meet a fixed charge coverage ratio (LTM Adjusted EBITDA - Pro Forma - CEOC Restricted to fixed charges) of at least 2.0 to 1.0 , a total first priority secured leverage ratio (first priority senior secured debt to LTM Adjusted EBITDA - Pro Forma - CEOC Restricted) of no more than 4.5 to 1.0 and/or a consolidated leverage ratio (consolidated total debt to LTM Adjusted EBITDA - Pro Forma - CEOC Restricted) of no more than 7.25 to 1.0 . As of December 31, 2012 , our total first priority secured leverage ratio and consolidated leverage ratio were 6.15 to 1.0 and 12.11 to 1.0 , respectively. For the year ended December 31, 2012 , our earnings were insufficient to cover fixed charges by $407.2 million . For purposes of calculating the fixed charge coverage ratio, fixed charges includes consolidated interest expense less interest income and any cash dividends paid on preferred stock (other than amounts eliminated in consolidation). For purposes of calculating the total first priority secured leverage ratio and the consolidated leverage ratio, the amounts of first priority senior secured debt and consolidated total debt, respectively, are reduced by the amount of unrestricted cash on hand. The covenants that provide for the fixed charge coverage ratio, total first priority secured leverage ratio and consolidated leverage ratio described in this paragraph are not maintenance covenants. The indenture and other agreements governing our cash pay debt and PIK toggle debt limit our (and most of our subsidiaries’) ability to among other things: (i) incur additional debt or issue certain preferred shares; (ii) pay dividends or make distributions in respect of our capital stock or make other restricted payments; (iii) make certain investments; (iv) sell certain assets; (v) engage in any business or own any material asset other than all of the equity interest of CEOC so long as certain investors hold a majority of the notes; (vi) create or permit to exist dividend and/or payment restrictions affecting its restricted subsidiaries; (vii) create liens on certain assets to secure debt; (viii) consolidate, merge, sell or otherwise dispose of all or substantially all of its assets; (ix) enter into certain transactions with its affiliates; and (x) designate its subsidiaries as unrestricted subsidiaries. Subject to certain exceptions, the indenture governing the notes and the agreements governing the other cash pay debt and PIK toggle debt will permit us and our restricted subsidiaries to incur additional indebtedness, including secured indebtedness. 17 Long-Term Debt The following table presents our outstanding debt as of December 31, 2012 and 2011 : ____________________ 18 Detail of Debt (dollars in millions) Final Maturity Rate(s) at Dec. 31, 2012 Face Value at Dec. 31, 2012 Book Value at Dec. 31, 2012 Book Value at Dec. 31, 2011 Credit Facilities (c) Term Loans B1 - B3 2015 3.21% - 3.31% $ 1,025.8 $ 1,025.8 $ 5,000.5 Term Loan B4 2016 9.50% 970.0 954.5 961.2 Term Loan B5 2018 4.46% 1,222.7 1,218.8 1,218.2 Term Loan B6 2018 5.46% 2,853.8 2,812.6 — Revolving Credit Facility 2014 — — — 155.0 Revolving Credit Facility 2017 — — — — Secured Debt Senior Secured Notes (c) 2017 11.25% 2,095.0 2,060.2 2,054.6 Senior Secured Notes (c) 2020 8.50% 1,250.0 1,250.0 — Senior Secured Notes (c) 2020 (a) 9.00% 1,500.0 1,486.9 — Second-Priority Senior Secured Notes (c) 2018 12.75% 750.0 742.9 742.1 Second-Priority Senior Secured Notes (c) 2018 10.00% 4,553.1 2,260.2 2,131.2 Second-Priority Senior Secured Notes (c) 2015 10.00% 214.8 173.7 164.2 Chester Downs Term Loan — — — — 221.3 Chester Downs Senior Secured Notes 2020 9.25% 330.0 330.0 — PHW Las Vegas Senior Secured Loan 2015 (b) 3.07% 515.5 438.2 417.9 Linq/Octavius Senior Secured Loan 2017 9.25% 450.0 446.5 445.9 Bill's Gamblin' Hall & Saloon Credit Facility 2019 11.00% 185.0 181.4 — Subsidiary-Guaranteed Debt (d) Senior Notes 2016 10.75% 478.6 478.6 478.6 Senior PIK Toggle Notes 2018 10.75%/11.5% 13.2 13.2 11.7 Unsecured Senior Debt (c) 5.375% 2013 5.375% 125.2 116.6 108.6 7.00% 2013 7.00% 0.6 0.6 0.6 5.625% 2015 5.625% 791.8 666.2 624.9 6.50% 2016 6.50% 573.2 463.0 439.3 5.75% 2017 5.75% 538.8 395.9 375.7 Floating Rate Contingent Convertible Senior Notes 2024 0.57% 0.2 0.2 0.2 Other Unsecured Borrowings Special Improvement District Bonds 2037 5.30% 64.3 64.3 65.7 Note payable to Caesars Entertainment 2014 3.28% 516.4 516.4 322.1 Other — — — — 0.4 Capitalized Lease Obligations to 2017 3.57% - 11.0% 27.3 27.3 13.6 Total Debt 21,045.3 18,124.0 15,953.5 Current Portion of Long-Term Debt (a) (901.5 ) (876.3 ) (40.4 ) Long-term debt $ 20,143.8 $ 17,247.7 $ 15,913.1 (a) Includes the note offering that occurred in December 2012. Although the notes mature in 2020, $750.0 million face value notes offered in December 2012 are classified as short-term obligations within our December 31, 2012 balance sheet because the escrow conditions were not met as of that date. (b) Based on our ability and intent, assumes the exercise of extension options to move the maturity from 2013 to 2015, subject to certain conditions. (c) Guaranteed by Caesars Entertainment. (d) Guaranteed by Caesars Entertainment and certain wholly-owned subsidiaries of CEOC. As of December 31, 2012 and 2011 , book values of debt are presented net of unamortized discounts of $2,921.3 million and $3,135.0 million, respectively. Current Portion of Long-Term Debt Our current portion of long-term debt includes required interim principal payments on certain Term Loans, the special improvement district bonds and capitalized lease obligations. The current portion of long-term debt also includes $750.0 million , $125.2 million and $ 0.6 million of 9.00% senior secured notes, 5.375% unsecured senior debt and 7.00% unsecured senior debt, respectively. The $750.0 million of 9.00% senior secured notes relate to the December 2012 offering, the proceeds of which were placed into escrow. This is classified as current portion of long-term debt in our Consolidated Condensed Balance Sheet at December 31, 2012 due to escrow conditions not being satisfied until February 20, 2013 . The current portion of long-term debt excludes the PHW Las Vegas senior secured loan based upon our ability and intent to exercise of our option to extend the maturity to 2015, subject to certain conditions. As of December 31, 2012 , aggregate annual principal maturities for the four years subsequent to 2013, assuming all conditions to extend the maturity of the PHW Las Vegas senior secured loan are met and such maturity is extended, are as follows: 2014, $23.7 million ; 2015, $2,601.0 million ; 2016, $2,034.2 million ; 2017, $3,642.6 million . Revolving Credit Facility with Caesars Caesars Entertainment Corporation has a revolving credit facility in favor of CEOC pursuant to which Caesars Entertainment will make one or more unsecured loans to CEOC in a maximum principal amount not to exceed $1.0 billion outstanding at any time. The entire outstanding amount, plus any accrued and unpaid interest, matures on November 14, 2017, and bears interest at a rate per annum equal to LIBOR, as defined in the CEOC Credit Agreement, plus 3.0%. Interest is payable quarterly in arrears or, at CEOC's election such interest may be added to the loan balance owed to Caesars Entertainment. There was $516.4 million outstanding under the agreement at December 31, 2012 . PHW Las Vegas Senior Secured Loan In February 2010, CEOC acquired 100% of the equity interests of PHW Las Vegas, which owns the Planet Hollywood Resort and Casino located in Las Vegas, Nevada. In connection with this transaction, PHW Las Vegas assumed a $554.3 million, face value, senior secured loan, and a subsidiary of CEOC canceled certain debt issued by PHW Las Vegas' predecessor entities. The outstanding amount is secured by the assets of PHW Las Vegas and is non-recourse to other subsidiaries of the Company. In connection with the transaction and the assumption of debt, PHW Las Vegas entered into the Amended and Restated Loan Agreement with Wells Fargo Bank, N.A., as trustee for The Credit Suisse First Boston Mortgage Securities Corp. Commercial Mortgage Pass-Through Certificates, Series 2007-TFL2 (“Lender”). On October 26, 2011 , we exercised the option to extend the PHW Las Vegas senior secured loan to 2013 . The loan contains an additional extension option which, if exercised, would extend its maturity until April 2015 . The conditions to extend the maturity date are (i) no default or event of default on the date that notice of the extension is given and on the first extended maturity date of December 9, 2013 , (ii) notice of the election of the extension, (iii) the purchase of an interest rate cap (or provision of an acceptable alternative letter of credit or other support) with a strike price such that our Debt Service Coverage Ratio is at least 1.1 : 1.00 as of the first extended maturity date and (iv) the ratio of (a) the Adjusted Net Cash Flow (defined as gross income from operations less operating expenses less 3% of gross income from operations) for the trailing twelve calendar month period to (b) the outstanding principal balance of the loan as of the first extended maturity date is not less than 9% . PHW Las Vegas is an unrestricted subsidiary of CEOC and, therefore, not a borrower under CEOC’s Credit Facilities. A subsidiary of CEOC manages the property for PHW Las Vegas for a fee. PHW Las Vegas may, at its option, voluntarily prepay the loan in whole or in part upon twenty (20) days prior written notice to Lender. PHW Las Vegas is required to prepay the loan in (i) the amount of any insurance proceeds received by Lender for which Lender is not obligated to make available to PHW Las Vegas for restoration in accordance with the terms of the Amended and Restated Loan Agreement, (ii) the amount of any proceeds received from the operator of the timeshare property adjacent to the Planet Hollywood Resort and Casino, subject to the limitations set forth in the Amended and Restated Loan Agreement and (iii) the amount of any excess cash remaining after application of the cash management provisions of the Amended and Restated Loan Agreement. The PHW Las Vegas senior secured loan requires that the Company maintain certain reserve funds in respect of furniture, fixtures, and equipment, capital improvements, interest service, taxes, and insurance. Certain amounts deposited into the specified reserve funds represent restricted cash. 19 In connection with PHW Las Vegas’ Amended and Restated Loan Agreement, Caesars Entertainment entered into a Guaranty Agreement (the “Guaranty”) for the benefit of the Lender, pursuant to which Caesars Entertainment guaranteed to the Lender certain recourse liabilities of PHW Las Vegas. Caesars Entertainment’s maximum aggregate liability for such recourse liabilities is limited to $30.0 million , provided that such recourse liabilities of PHW Las Vegas do not arise from (i) events, acts, or circumstances that are actually committed by, or voluntarily or willfully brought about by, Caesars Entertainment or (ii) event, acts, or circumstances (regardless of the cause of the same) that provide actual benefit (in cash, cash equivalent, or other quantifiable amount) to the Company, to the full extent of the actual benefit received by the Company. Pursuant to the Guaranty, Caesars Entertainment is required to maintain a net worth or liquid assets of at least $100.0 million . Octavius and Linq Projects On April 25, 2011 , the Company, together with certain indirect wholly-owned subsidiaries of CEOC (the “Borrowers”) entered into a credit agreement (the “Octavius/Linq Credit Agreement”) pursuant to which the Borrowers incurred financing to complete the Octavius Tower at Caesars Palace Las Vegas (“Project Octavius”) and to develop a retail, dining, and entertainment corridor located between the Imperial Palace Hotel and Casino and the Flamingo Las Vegas on the Las Vegas Strip (“Project Linq” and, together with Project Octavius, the “Development”). The Octavius/Linq Credit Agreement provides for a $450.0 million senior secured term facility (the “Term Facility”) with a six-year maturity, which is secured by all material assets of the Borrowers. The proceeds of the Term Facility were funded during the second quarter of 2011 and are included as restricted cash on the Company's balance sheet until drawn to pay for costs incurred in the Development. These funds are being used by the Borrowers to finance the Development and to pay fees and expenses incurred in connection with the Term Facility and the transactions related thereto. As a condition to the provision of the Term Facility, the Company provided a completion guarantee (the “Completion Guaranty”) with respect to the Development, which guarantees completion of the construction of the Development, availability of contemplated working capital and receipt of material permits and licenses necessary to open and operate the Development. The maximum liability of the Company under the completion guarantee is $25.0 million in respect of Project Octavius and $75.0 million in respect of Project Linq. In connection with the Development and the Term Facility, the Company contributed the existing Octavius Tower at Caesars Palace Las Vegas and related assets to one of the Borrowers, the book value of which was $312.0 million . In August 2011 , the Company completed the contribution of the existing O’Shea's casino (adjacent to the Flamingo Las Vegas) and related real property and other assets comprising the components of Project Linq to one of the Borrowers, the book value of which was $319.2 million . In connection with Project Octavius, one of the Borrowers leases the Octavius Tower at Caesars Palace Las Vegas to a wholly-owned subsidiary of CEOC. Upon completion of Project Linq, one of the Borrowers will lease the gaming space in Project Linq to a wholly-owned subsidiary of CEOC. The total lease payments will be $50.0 million annually once the Development is open. As described above, CEOC has guaranteed certain of the obligations of the lessees under the Project Octavius and Project Linq leases. Pursuant to the Octavius/Linq Credit Agreement, the Company is required to make cash contributions to the Borrowers from time to time to fund a total equity commitment to the Development of $76.0 million . In addition, from time to time, the Company may be required to make additional cash contributions to the Borrowers to fund certain portions of the Development upon the occurrence of certain conditions. In addition to potential contributions pursuant to the Completion Guaranty, the Company has guaranteed all payments of interest under the Term Facility until the commencement of operations of the Octavius Tower at Caesars Palace Las Vegas and Project Linq and guaranteed the performance of the Borrowers of the first lien leverage ratio maintenance covenant (the “Performance Guarantee”) by agreeing, upon certain conditions, to make cash equity contributions to the Borrowers from time to time pursuant to the terms of the Term Facility. The maximum liability of the Company under the performance guarantee is $50.0 million . Except in the circumstances described above, neither the Company nor CEOC has any material obligations under the Term Facility, and the Term Facility is non-recourse to the Company or CEOC. The Octavius/Linq Credit Agreement requires that the Borrowers maintain certain reserve funds in respect of furniture, fixtures, and equipment, capital improvements, interest service, taxes and insurance. Amounts deposited into the specified reserve funds represent restricted cash. In addition, the Octavius/Linq Credit Agreement requires up to 50.0% of excess cash flow (as defined in the agreement), depending on the Senior Secured Leverage Ratio for that period, be applied to prepay the Term Facility. 20 Bill's Credit Facility In November 2012 , the Company entered into a $185.0 million , seven-year senior secured credit facility bearing interest at LIBOR plus 9.75% with a LIBOR floor of 1.25% (the "Bill's Credit Facility") to fund the renovation of Bill's Gamblin' Hall & Saloon into a boutique lifestyle hotel that includes a dayclub/nightclub. The renovation will include a complete remodeling of the guest rooms, casino floor, and common areas, the addition of a second floor restaurant, and the construction of an approximately 65,000 square foot rooftop pool and dayclub/nightclub. The Company will own the property and manage the casino, hotel, and food and beverage operations, and the dayclub/nightclub will be leased to a third party. The proceeds of the Bill's Credit Facility were funded during the fourth quarter and are included as restricted cash on the Company's balance sheet until drawn to pay for costs incurred in the renovation. As part of the credit facility, the Company provided a completion guarantee to ensure prompt and complete performance to (i) complete construction and pay all project costs in accordance with the loan documents, (ii) provide the initial working capital specified in the project budget, and (iii) obtain all material permits and licenses necessary for the commencement of operations. The maximum liability of the Company under the completion guarantee is $20.0 million . Interest and Fees Borrowings under the Credit Facilities, other than borrowings under the Incremental Loans, the Extended Term Loans and the Term B-6 Loans, bear interest at a rate equal to the then-current LIBOR rate, or at a rate equal to the alternate base rate, in each case plus an applicable margin. As of December 31, 2012 , the Credit Facilities, other than borrowings under the Incremental Loans, the Extended Term Loans and the Term B-6 Loans, bore interest at LIBOR plus 300 basis points for the term loans. The revolver loan bore interest at LIBOR plus 300 basis points or the alternate base rate plus 200 basis points. The swingline loan bore interest at the alternate base rate plus 150 basis points. The extended revolver loan bore interest at LIBOR plus 525 basis points or the alternate base rate plus 425 basis points. Borrowings under the Incremental Loans bear interest at a rate equal to either the alternate base rate or the greater of (i) the then-current LIBOR rate or (ii) 2.0% ; in each case plus an applicable margin. At December 31, 2012 , borrowings under the Incremental Loans bore interest at the minimum base rate of 2.0% , plus 750 basis points. Borrowings under the Extended Term Loans bear interest at a rate equal to either the alternate base rate or the then-current LIBOR rate, plus an applicable margin. At December 31, 2012 , borrowings under the Extended Term Loans bore interest at LIBOR plus 425 basis points. Borrowings under the Term B-6 Loans bear interest at a rate equal to either the alternate base rate or the then-current LIBOR rate, plus an applicable margin. At December 31, 2012 , borrowings under the Term B-6 Loans bore interest at LIBOR plus 525 basis points. In addition, on a quarterly basis, we are required to pay each lender (i) a commitment fee in respect of any unborrowed amounts under the revolving credit facility and (ii) a letter of credit fee in respect of the aggregate face amount of outstanding letters of credit under the revolving credit facility. As of December 31, 2012 , the Credit Facilities bore a commitment fee for unborrowed amounts of 50 basis points. Our Senior Secured Notes, including the Second-Priority Senior Secured Notes, and our unsecured debt, which is fixed-rate debt, have semi-annual interest payments, with the majority of those payments on June 15 and December 15. The amount outstanding under the PHW Las Vegas senior secured loan bears interest at a rate per annum equal to LIBOR plus 2.859% . A subsidiary of CEOC owns interest-only participations in a portion of the PHW Las Vegas senior secured loan that bear interest at a fixed rate equal to 1.59% per year. The Linq/Octavius Term Facility bears interest at a rate equal to either the alternate base rate, plus an applicable margin or the greater of (i) the then-current LIBOR rate or (ii) 1.25% , in each case plus an applicable margin. At December 31, 2012 , borrowings under the agreement bore interest at the minimum base rate of 1.25% , plus 800 basis points. 21 Collateral and Guarantors CEOC’s Credit Facilities are guaranteed by Caesars Entertainment and are secured by a pledge of CEOC’s capital stock and by substantially all of the existing and future property and assets of CEOC and its material, wholly-owned domestic subsidiaries, including a pledge of the capital stock of CEOC’s material, wholly-owned domestic subsidiaries and 65.0% of the capital stock of the first-tier foreign subsidiaries, in each case subject to exceptions. At December 31, 2012 , the following casino properties have mortgages under the Credit Facilities: Additionally, certain undeveloped land in Las Vegas is mortgaged. Derivative Instruments Derivative Instruments - Interest Rate Swap Agreements We use interest rate swaps to manage the mix of our debt between fixed and variable rate instruments. As of December 31, 2012 , we have entered into eight interest rate swap agreements for notional amounts totaling $5,750.0 million . The difference to be paid or received under the terms of the interest rate swap agreements is accrued as interest rates change and recognized as an adjustment to interest expense for the related debt. Changes in the variable interest rates to be paid or received pursuant to the terms of the interest rate swap agreements will have a corresponding effect on future cash flows. The major terms of the interest rate swap agreements as of December 31, 2012 are as follows: The variable rate received on our interest rate swap agreements did not materially change as a result of the January 25, 2013 reset. During the second quarter of 2011, the Company completed transactions to amend and extend certain swap contracts. Prior to the amendment, a $1,000.0 million swap had a fixed payment rate of 4.172% and a maturity date of April 25, 2012 . Two $2,000.0 million swaps were split into four $1,000.0 million tranches. The previous terms included fixed payment rates of 4.276% and 4.263% and maturity dates of April 25, 2013 . The amended payment rates and maturity dates are shown in the table above. 22 Las Vegas Atlantic City Louisiana/Mississippi Iowa/Missouri Caesars Palace Bally's Atlantic City Harrah's New Orleans Harrah's Council Bluffs Bally's Las Vegas Caesars Atlantic City (Hotel only) Horseshoe Council Bluffs/ The Quad Resort & Casino Showboat Atlantic City Harrah's Louisiana Downs Bluffs Run Horseshoe Bossier City Harrah's Tunica Horseshoe Tunica Tunica Roadhouse Hotel & Casino Illinois/Indiana Other Nevada Horseshoe Southern Indiana Harrah's Reno Harrah's Metropolis Harrah's Lake Tahoe Horseshoe Hammond Harveys Lake Tahoe Effective Date Notional Amount (in millions) Fixed Rate Paid Variable Rate Received as of Dec. 31, 2012 Next Reset Date Maturity Date April 25, 2011 $ 250.0 1.351 % 0.210 % January 25, 2013 January 25, 2015 April 25, 2011 250.0 1.347 % 0.210 % January 25, 2013 January 25, 2015 April 25, 2011 250.0 1.350 % 0.210 % January 25, 2013 January 25, 2015 January 25, 2011 1,000.0 3.068 % 0.210 % January 25, 2013 January 25, 2015 April 25, 2011 1,000.0 3.150 % 0.210 % January 25, 2013 January 25, 2015 January 25, 2011 1,000.0 3.750 % 0.210 % January 25, 2013 January 25, 2015 April 25, 2011 1,000.0 3.264 % 0.210 % January 25, 2013 January 25, 2015 January 25, 2011 1,000.0 3.814 % 0.210 % January 25, 2013 January 25, 2015 In December 2011 , the Company amended the terms of two $1,000.0 million swap contracts with a corresponding change in the elected interest rate on $2,000.0 million of term loans. Effective January 25, 2012 through January 25, 2014 , the variable rate received on the swaps changed from three-month to one-month LIBOR , and the fixed payment rate is reduced by 12 basis points. In connection with the amendment, the Company determined that it was not probable that previously forecasted transactions would occur on all interest rate swaps. Therefore, we removed the cash flow hedging designation for all of our interest rate swap agreements and were required to reclassify $183.2 million of deferred losses recorded in Accumulated Other Comprehensive Loss ("AOCL") into interest expense. Prior to removing the cash flow hedging designation, we amortized $51.2 million of deferred losses frozen in AOCL to interest expense for the year ended December 31, 2011 . Any future changes in fair value of the swap agreements will be recognized in interest expense during the period in which the changes in value occur. On January 18, 2012 , the Company amended the terms of three $1,000.0 million notional value of interest rate swap contracts with a corresponding change in the elected interest rate on $3,000.0 million of term loans under the Credit Facilities. Effective January 25, 2012 through January 25, 2014 , the variable rate received on the swaps changed from three-month to one-month LIBOR and the fixed payment rate was reduced by 16.5 basis points. The table above reflects the amended payment rates. Derivative Instruments - Interest Rate Cap Agreement In 2010 , as required under the PHW Las Vegas Amended and Restated Loan Agreement, we entered into an interest rate cap agreement to partially hedge the risk of future increases in the variable rate of the PHW Las Vegas senior secured loan. The interest rate cap agreement was for a notional amount of $554.3 million at a LIBOR cap rate of 5.0% and matured on December 9, 2011 . To give proper consideration to the prepayment requirements of the PHW Las Vegas senior secured loan, we designated $525.0 million of the $554.3 million notional amount of the interest rate cap as a cash flow hedging instrument for accounting purposes. On May 1, 2011 , we removed the cash flow hedging designation for the interest rate cap agreement. On December 9, 2011 , we entered into a new interest rate cap agreement for a notional amount of $517.7 million at a LIBOR cap rate of 7.0% and matures on December 9, 2013 . Any change in fair value is recognized in interest expense during the period in which the change in value occurs. Derivative Instruments - Other During the second quarter of 2012 , the Company entered into a written put option (the “Option”) for certain preferred equity interests. The potential future aggregate cash payments of $19.0 million as of December 31, 2012 related to the Option may occur from time to time. Based on the structure of this security as a written put option, the obligation for these potential cash payments is not reflected in our Consolidated Condensed Balance Sheets. Additionally, the Option is recorded in our Consolidated Condensed Balance Sheets at its fair value, which was de minimis as of December 31, 2012 . Derivative Instruments – Impact on Financial Statements The following table represents the fair values of derivative instruments in the Consolidated Condensed Balance Sheets as of December 31: 23 Asset Derivatives Liability Derivatives 2012 2011 2012 2011 (In millions) Balance Sheet Location Fair Value Balance Sheet Location Fair Value Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives not designated as hedging instruments Interest rate swaps $ — $ — Deferred credits and other $ (306.4 ) Deferred credits and other $ (336.1 ) Interest rate cap — — — — Total Derivatives $ — $ — $ (306.4 ) $ (336.1 ) The following table represents the effect of derivative instruments in the Consolidated Condensed Statements of Comprehensive Loss for the years ended December 31, 2012 and 2011 for amounts transferred into or out of AOCL: In addition to the impact on interest expense from amounts reclassified from AOCL, the difference to be paid or received under the terms of the interest rate swap agreements is recognized as interest expense and is paid monthly. This cash settlement portion of the interest rate swap agreements increased interest expense for the years ended December 31, 2012 and 2011 by $169.6 million and $201.1 million , respectively. At December 31, 2012 , our variable-rate debt, excluding $5,750.0 million of variable-rate debt hedged using interest rate swap agreements, represents 9% of our total debt, while our fixed-rate debt is 91% of our total debt. GUARANTEES OF THIRD-PARTY DEBT AND OTHER OBLIGATIONS AND COMMITMENTS The following table summarizes our contractual obligations and other commitments as of December 31, 2012 , prior to consideration of the 2013 capital transactions mentioned above. ____________________ 24 (In millions) Amount of (Gain) or Loss Recognized in AOCL (Effective Portion) Location of (Gain) or Loss Reclassified from AOCL Into Net Loss (Effective Portion) Amount of (Gain) or Loss Reclassified from AOCL into Net Loss (Effective Portion) Location of (Gain) or Loss Recognized in Net Loss (Ineffective Portion) Amount of (Gain) or Loss Recognized in Net Loss (Ineffective Portion) Derivatives designated as hedging instruments 2012 2011 2012 2011 2012 2011 Interest Rate Contracts $ — $ 60.7 Interest Expense $ — $ 238.6 Interest Expense $ — $ (56.7 ) (In millions) Location of (Gain) or Loss Recognized in Net Loss Amount of (Gain) or Loss Recognized in Net Loss Derivatives not designated as hedging instruments 2012 2011 Interest Rate Contracts Interest Expense $ (29.6 ) $ (15.5 ) Contractual Obligations (a) Payments due by Period (In millions) Total Less than 1 year 1-3 years 4-5 years After 5 years Debt, face value (c) $ 21,018.0 $ 889.7 $ 2,609.2 $ 5,676.7 $ 11,842.4 Capital lease obligations 27.3 11.8 15.5 — — Estimated interest payments (b), (c) 9,152.8 1,857.3 3,480.7 2,677.8 1,137.0 Operating lease obligations 1,623.7 70.6 123.3 109.5 1,320.3 Purchase order obligations 62.4 62.4 — — — Community reinvestment 74.7 6.5 12.8 12.9 42.5 Construction commitments 464.7 464.7 — — — Entertainment obligations (d) 181.3 48.8 50.6 37.9 44.0 Letters of credit 90.6 90.6 — — — Minimum payments to tribes (e) 74.1 13.8 25.8 24.0 10.5 Other contractual obligations 342.1 60.1 56.9 35.9 189.2 $ 33,111.7 $ 3,576.3 $ 6,374.8 $ 8,574.7 $ 14,585.9 (a) In addition to the contractual obligations disclosed in this table, we have unrecognized tax benefits that, based on uncertainties associated with the items and we are unable to make reasonably reliable estimates of the period of potential cash settlements, if any, with taxing authorities. (b) Estimated interest for variable-rate debt included in this table is based on rates at December 31, 2012 . Estimated interest includes the estimated impact of our interest rate swap and interest rate cap agreements. (c) Debt maturities and estimated interest assumes the extension of the maturity of the PHW Las Vegas senior secured loan from 2013 to 2015 , resulting in a net increase of interest of $30.7 million . Extension of the PHW Las Vegas senior secured loan is subject to certain conditions. 25 (d) Entertainment obligations represent obligations to pay performers that have contracts for future performances at one or more of our properties. (e) The agreements pursuant to which we manage casinos on Indian lands contain provisions required by law that provide that a minimum monthly payment be made to the tribe. That obligation has priority over scheduled repayments of borrowings for development costs and over the management fee earned and paid to the manager. In the event that insufficient cash flow is generated by the operations to fund this payment, we must pay the shortfall to the tribe. Subject to certain limitations as to time, such advances, if any, would be repaid to us in future periods in which operations generate cash flow in excess of the required minimum payment. These commitments will terminate upon the occurrence of certain defined events, including termination of the management contract. Our aggregate monthly commitment for the minimum guaranteed payments pursuant to the contracts for the three managed Indian-owned facilities now open is $1.2 million per month. Each of these casinos currently generates sufficient cash flows to cover all of its obligations, including its debt service. EXHIBIT 99.2 Supplemental Discussion of Caesars Entertainment's Commercial Mortgage-Backed Securities Related Properties Financial Information The properties securing Caesars Entertainment's commercial mortgage-backed securities (“CMBS Properties”) originally borrowed $6,500.0 million of CMBS financing (the “CMBS Financing”). The CMBS Financing is secured by the assets of the CMBS Properties and certain aspects of the financing are guaranteed by Caesars Entertainment. The CMBS properties are Harrah's Las Vegas, Rio, Flamingo Las Vegas, Harrah's Atlantic City, Paris Las Vegas, and Harrah's Laughlin. In this discussion, the words “we” and “our” refer to the CMBS Properties. We are providing this financial information pursuant to the Second Amended and Restated Loan Agreement, dated as of August 31, 2010 (the “CMBS Loan Agreement”), related to the CMBS Financing. Subsequent to the filing of our annual report on Form 10-K for the year ended December 31, 2011, including Exhibit 99.2 thereto, we identified certain deferred tax gains primarily related to the contribution of O’Shea’s Casino and certain other assets to a subsidiary of Caesars Entertainment Operating Company, Inc. in connection with their development of a retail, dining and entertainment corridor located between the Imperial Palace Hotel and Casino and the Flamingo Las Vegas on the Las Vegas strip. The net impact on the financial statements included herein of correcting for this error is to reduce our deferred tax liabilities and increase our stockholder’s equity by $22.8 million as of December 31, 2011. There are no cash impacts as a result of this correction. OPERATING RESULTS FOR CMBS PROPERTIES Overall CMBS Properties Results The following tables represent CMBS Properties' unaudited Combined Condensed Balance Sheets as of December 31, 2012 and 2011 , and their unaudited Combined Condensed Statements of Operations and unaudited Combined Condensed Statements of Cash Flows for the years ended December 31, 2012 and 2011 . 1 CMBS Properties Combined Condensed Balance Sheets (Unaudited) (In millions) 2 As of December 31, 2012 2011 Assets Current assets Cash and cash equivalents $ 126.7 $ 151.2 Receivables, net of allowance for doubtful accounts of $33.0 and $34.4 69.7 77.2 Deferred income taxes 10.4 14.0 Prepayments and other current assets 70.1 62.2 Inventories 13.3 10.6 Total current assets 290.2 315.2 Property and equipment, net of accumulated depreciation of $753.9 and $608.1 4,917.8 5,094.2 Goodwill 1,690.6 1,690.6 Intangible assets other than goodwill 481.7 543.7 Restricted cash 57.2 74.0 Deferred charges and other 90.2 109.3 $ 7,527.7 $ 7,827.0 Liabilities and Stockholder's Equity Current liabilities Accounts payable $ 42.5 $ 29.0 Interest payable 7.1 7.7 Accrued expenses 132.6 154.5 Current portion of long-term debt 3.6 — Due to affiliates, net 38.7 15.9 Total current liabilities 224.5 207.1 Long-term debt 4,665.5 5,026.0 Deferred credits and other 24.0 32.4 Deferred income taxes 1,516.9 1,523.4 6,430.9 6,788.9 Total equity 1,096.8 1,038.1 $ 7,527.7 $ 7,827.0 CMBS Properties Combined Condensed Statements of Operations (Unaudited) (In millions) 3 Year Ended December 31, 2012 2011 Revenues Casino $ 1,192.7 $ 1,229.0 Food and beverage 505.5 501.2 Rooms 446.0 453.4 Other 185.2 198.8 Less: casino promotional allowances (353.7 ) (357.0 ) Net revenues 1,975.7 2,025.4 Operating expenses Direct Casino 620.7 644.0 Food and beverage 248.2 243.6 Rooms 121.1 115.8 Property, general, administrative, and other 492.7 524.4 Depreciation and amortization 159.5 156.3 Write-downs and reserves, net of recoveries 10.7 7.0 Impairment of intangible assets 3.0 — (Income)/loss on interests in non-consolidated affiliates (1.4 ) 1.0 Corporate expense 80.4 85.0 Acquisition and integration costs — 0.2 Amortization of intangible assets 59.0 59.6 Total operating expenses 1,793.9 1,836.9 Income from operations 181.8 188.5 Interest expense, net of interest capitalized (203.0 ) (210.1 ) Gains on early extinguishments of debt 135.0 47.5 Other income, including interest income 0.8 1.0 Income before income taxes 114.6 26.9 Provision for income taxes (39.1 ) (9.0 ) Net income $ 75.5 $ 17.9 CMBS Properties Combined Condensed Statements of Cash Flows (Unaudited) (In millions) 4 Year Ended December 31, 2012 2011 Cash flows provided by operating activities $ 30.7 $ 168.8 Cash flows from investing activities Acquisitions of property and equipment, net of change in related payables (57.1 ) (34.3 ) Change in restricted cash 4.8 (100.7 ) Other (1.9 ) (4.4 ) Cash flows used in investing activities (54.2 ) (139.4 ) Cash flows from financing activities Cash paid for early extinguishments of debt (229.3 ) (108.5 ) Cash received from Caesars Entertainment for financing transactions 229.3 108.5 Other (1.0 ) — Cash flows used in financing activities (1.0 ) — Net (decrease)/increase in cash and cash equivalents (24.5 ) 29.4 Cash and cash equivalents, beginning of period 151.2 121.8 Cash and cash equivalents, end of period $ 126.7 $ 151.2 Cash paid for interest $ 161.2 $ 166.3 COMBINED OPERATING RESULTS ____________________ * Operating margin is calculated as income from operations divided by net revenues for the respective period. Net revenues for 2012 decreased $49.7 million or 2.5% from 2011 due mainly to revenue declines at Harrah's Atlantic City ("HAC"), Harrah's Las Vegas ("HLV") and Flamingo Las Vegas ("FLV"). The declines at HAC were the result of the closure of this property caused by Hurricane Sandy, which made landfall on October 29, 2012, and continued competitive pressures in the Atlantic City market. We estimate that the negative impact of Hurricane Sandy on net revenues was approximately $7 million to $10 million . HAC reopened five days after the hurricane; however, the economy has been slow to recover due to the devastation it caused. We expect that the Atlantic City market will continue to be challenged as a result of the slow recovery from the hurricane and competitive pressures. Net revenues for 2012 at HLV and FLV have been negatively impacted by Caesars' Project Linq construction activities, which included the closure of O'Shea's casino and several retail outlets at HLV earlier this year. We estimate that Project Linq construction activities reduced 2012 net revenues by approximately $17 million to $23 million . Income from operations decreased $ 6.7 million or 3.6% due mainly to lower revenues, partially offset by a decline in property operating expenses attributable in part to our cost reduction efforts. Additionally, we estimate that the negative impact of Hurricane Sandy and Project Linq on income from operations was approximately $6 million to $9 million and $7 million to $12 million , respectively. Net income for 2012 increased $57.6 million from 2011 , due primarily to a $87.5 million increase in gains on early extinguishments of debt, partially offset by an increase in the amount of tax provision. See below for further discussion. OTHER FACTORS AFFECTING NET INCOME Interest Expense, Net of Interest Capitalized Interest expense, net of interest capitalized decreased by $7.1 million for 2012 compared with 2011 due primarily to lower debt balances resulting from CMBS Loan repurchases in 2012 compared with 2011, which are discussed more fully in the “Liquidity and Capital Resources - Capital Resources - CMBS Loan Agreement” section that follows herein. Gains on Early Extinguishments of Debt Gains on early extinguishments of debt during 2012 and 2011 relate to amounts recognized as a result of 2012 CMBS Loan repurchases which are discussed more fully in the “Liquidity and Capital Resources - Capital Resources - CMBS Loan Agreement” section that follows herein. Effective Tax Rate For 2012 and 2011, the CMBS Properties recorded a tax provision of $39.1 million and $9.0 million , respectively, on pretax income from continuing operations of $114.6 million and $26.9 million , respectively. This resulted in effective tax rates of 34.1% and 33.5% for the years ended December 31, 2012 and December 31, 2011, respectively. The primary cause of the year-over-year increase in the effective tax rate results from the incurrence of higher state income taxes as comparatively more profits were earned in higher tax jurisdictions in 2012 than 2011. 5 (Dollars in millions) 2012 2011 Percent Favorable/(Unfavorable) Casino revenues $ 1,192.7 $ 1,229.0 (3.0 )% Net revenues 1,975.7 2,025.4 (2.5 )% Income from operations 181.8 188.5 (3.6 )% Net income 75.5 17.9 321.8 % Operating margin* 9.2 % 9.3 % (0.1) pts Expense/(Income) (Dollars in millions) 2012 2011 Percent Favorable/(Unfavorable) Interest expense, net of interest capitalized $ 203.0 $ 210.1 3.4 % Gains on early extinguishments of debt (135.0 ) (47.5 ) 184.2 % Provision for income taxes 39.1 9.0 (334.4 )% OTHER ITEMS In August 2011, we contributed the assets of O’ Shea’s casino (adjacent to the Flamingo Las Vegas) and certain other assets of the CMBS Properties' to a subsidiary of Caesars Entertainment Operating Company, Inc. A portion of the contributed assets were leased back by a CMBS Property. In May 2012, O’Shea’s ceased operations and the lease-back agreement expired. As a result of the expiration of the agreement, $89.3 million of assets are no longer included as assets of the CMBS Properties. LIQUIDITY AND CAPITAL RESOURCES Cost Savings Initiatives Caesars Entertainment has undertaken comprehensive cost-reduction efforts to rightsize expenses with business levels through its implementation of "Project Renewal," an initiative designed to reinvent certain aspects of Caesars' functional and operating units to gain significant further cost reductions and streamline its operations. As part of Project Renewal, Caesars implemented a shared-services organization that enables more efficient decision making and sharing of best practices. Caesars believes that this organization provides it with a permanently lower cost structure and benefits from a greater concentration of specified talent and quicker decision making. In accordance with our shared services agreement with Caesars Entertainment, we estimate that Project Renewal and other cost-savings programs produced $ 57.2 million in incremental cost savings for the year ended December 31, 2012 compared with 2011 . Additionally, as of December 31, 2012 , we expect that these and additional new cost-savings programs will produce additional annual cost savings of $ 60.6 million , based on the full implementation of current projects that are in process. As Caesars realizes savings or identifies new cost-reduction activities, this amount will change. Capital Spending and Development We incur capital expenditures in the normal course of business, and we perform ongoing refurbishment and maintenance at our existing casino entertainment facilities, to maintain our quality standards. We may pursue development and acquisition opportunities for additional casino entertainment and other hospitality facilities that meet our strategic and return on investment criteria. Cash used for capital expenditures in the normal course of business is typically made available from cash flows generated by our operating activities while cash used for development projects is typically funded from established debt programs, specific project financing, and additional debt offerings. Future development projects could require, individually and in the aggregate, significant capital commitments and, if completed, may result in significant additional revenues. The commitment of capital, the timing of completion, and the commencement of operations of development projects would be contingent upon, among other things, negotiation of final agreements and receipt of approvals from the appropriate political and regulatory bodies. We must also comply with covenants and restrictions set forth in the CMBS Loan Agreement. Our capital spending for the year ended December 31, 2012 totaled $57.1 million , net of an increase of $1.8 million of related payables. Estimated total capital expenditures for 2013 are expected to be between $70.0 million and $100.0 million . Liquidity Our cash and cash equivalents, excluding restricted cash, totaled $126.7 million at December 31, 2012 , compared to $151.2 million at December 31, 2011 . Restricted cash, including $38.7 million included in prepayments and other current assets, totaled $95.9 million at December 31, 2012 . Nearly all of the restricted cash consists of cash reserved under loan agreements for certain expenditures incurred in the normal course of business, real estate taxes, property insurance, and capital improvements. Our operating cash inflows are typically used for operating expenses, debt service costs, working capital needs, and capital expenditures in the normal course of business. From time to time, we distribute excess cash flow to Caesars Entertainment. The amount of excess cash flow that may be distributed is limited to 85.0% of excess cash flow with respect to such quarter, as defined in the CMBS Loan Agreement. The CMBS Properties are highly leveraged, and a significant amount of our liquidity needs are for debt service. As of December 31, 2012 , we had $4,669.1 million book value of indebtedness outstanding, including capital lease indebtedness. Cash paid for interest for the year ended December 31, 2012 was $161.2 million . Payments of short-term debt obligations and other commitments are expected to be made from operating cash flows. Long-term obligations are expected to be paid through operating cash flows, refinancing of debt, or, if necessary, additional debt offerings. 6 From time to time, depending upon market, pricing, and other conditions, as well as on our cash balances and liquidity, we may seek to acquire our indebtedness through open market purchases, privately negotiated transactions, redemption or otherwise, upon such terms and at such prices as we may determine (or as may be provided for in our debt agreement), for cash or other consideration. In addition, we have considered and will continue to evaluate potential transactions to reduce net debt, such as debt for debt exchanges and other transactions. There can be no assurance as to which, if any, of these alternatives or combinations thereof we may choose to pursue in the future as the pursuit of any alternative will depend upon numerous factors such as market conditions, our financial performance, and the limitations applicable to such transactions under our financing documents. Our ability to fund our operations, pay our debt obligations, and fund planned capital expenditures depends, in part, upon economic and other factors that are beyond our control, and disruptions in capital markets and restrictive covenants related to our existing debt could impact our ability to secure additional funds through financing activities. We believe that our cash and cash equivalents balance, our cash flows from operations, and the financing sources discussed herein will be sufficient to meet our normal operating requirements during the next 12 months and to fund capital expenditures. Please refer to the "Capital Resources - CMBS Loan Agreement" section that follows herein for details on our debt outstanding. This detail includes, among other things, details on our borrowings outstanding as of December 31, 2012 and 2011, changes in our debt outstanding and certain changes in the terms of existing debt for the year ended December 31, 2012 . It also includes details on interest and fees and restrictive covenants related to our borrowings. The "Derivative Instruments" section that follows herein discusses the use of an interest rate cap agreement to partially hedge the risk of future increases in the variable rates of the CMBS Financing. We cannot assure you that our business will generate sufficient cash flows from operations, or that future borrowings will be available to us, to fund our liquidity needs and pay our indebtedness. If we are unable to meet our liquidity needs or pay our indebtedness when it is due, we may have to reduce or delay refurbishment and expansion projects, reduce expenses, sell assets, or attempt to restructure our debt. Any such actions could negatively impact our competitive position and revenue generation. In addition, we have pledged a significant portion of our assets as collateral under our CMBS Financing agreements, and, if any of our lenders accelerate the repayment of borrowings, there can be no assurance that we will have sufficient assets to repay our indebtedness. Capital Resources - CMBS Financing On August 31, 2010 , we executed an agreement with the lenders to amend the terms of our CMBS Financing to, among other things, (i) provide our subsidiaries that are borrowers under the CMBS Loans the right to extend the maturity of the CMBS Loans, subject to certain conditions, by up to two years until February 13, 2015 , (ii) amend certain terms of the CMBS Loans with respect to reserve requirements, collateral rights, property release prices and the payment of management fees, (iii) provide for ongoing mandatory offers to repurchase CMBS Loans using excess cash flow from the CMBS properties at discounted prices, (iv) provide for the amortization of the mortgage loan in certain minimum amounts upon the occurrence of certain conditions and (v) provide for certain limitations with respect to the amount of excess cash flow from the CMBS properties that may be distributed to Caesars. Any CMBS Loan purchased pursuant to the amendments will be canceled. The conditions to the first extension of the initial maturity date to February 13, 2014 (the “first extended maturity date”) are (i) no default or event of default on the initial maturity date, (ii) notice of the election of the extension, (iii) delivery of an officer's certificate reaffirming and restating the representations and warranties in the loan agreements as of the initial maturity date, (iv) if the interest rate cap agreement then in effect is scheduled to mature prior to the first extended maturity date, the borrowers shall have obtained new or extended interest rate cap agreements extending the agreement through the first extended maturity date and (v) the borrowers shall have paid a 50 bps extension fee in respect of such extension. The conditions to the extension of the first extended maturity date to February 13, 2015 (the “second extended maturity date”) are (i) no default or event of default on the first extended maturity date, (ii) notice of the election of the extension, (iii) delivery of an officer's certificate reaffirming and restating the representations and warranties in the loan agreements as of the first extended maturity date, (iv) if the interest rate cap agreement then in effect is scheduled to mature prior to the second extended maturity date, the borrowers shall have obtained new or extended interest rate cap agreements extending the agreement through the second extended maturity date and (v) the borrowers shall have paid a 50 bps extension fee in respect of such extension. In order to extend the maturity of the CMBS Loans under the extension option, we are required to extend our interest rate cap agreement to cover the two years of extended maturity of the CMBS Loans, with a maximum aggregate purchase price for such extended interest rate cap for $5.0 million which we funded in connection with the closing of the 2010 amendment to the CMBS Loan Agreement. 7 During 2011, we purchased $158.1 million of aggregate face value of CMBS Loans for $108.5 million, recognizing total pre-tax gains of $47.5 million, net of deferred finance charges. During 2012, we purchased $367.3 million of aggregate face value of CMBS Loans for $229.3 million, recognizing total pre-tax gains of $135.0 million, net of deferred finance charges. At December 31, 2012 and 2011 , there was $4,660.5 million and $5,026.0 million , respectively, of book value outstanding under the CMBS Financing. The book value at December 31, 2012 is net of $3.6 million of fees incurred in connection with the August 2010 amendment, as further described below, and recorded as a discount on debt. In February 2013, we exercised the first of two extension options and extended the maturity of the CMBS Financing to 2014. We also entered into a new interest rate cap agreement as further discussed in the "Derivative Instruments" section that follows herein. Interest and Fees We make monthly interest payments on our CMBS financing. Restrictive Covenants and Other Matters The CMBS Financing includes negative covenants, subject to certain exceptions, restricting or limiting the ability of Caesars Entertainment and the CMBS Properties under the CMBS Financing to, among other things: (i) incur additional debt; (ii) create liens on assets; (iii) make certain investments, loans, and advances; (iv) consolidate, merge, sell, or otherwise dispose of all or any part of its assets or to purchase, lease, or otherwise acquire all or any substantial part of assets of any other person; (v) enter into certain transactions with its affiliates; (vi) engage in any business other than the ownership of the properties and business activities ancillary thereto; and (vi) amend or modify the articles or certificate of incorporation, by-laws, and certain agreements. The CMBS Financing also includes affirmative covenants that require the CMBS properties to, among other things, maintain the borrowers as "special-purpose entities", maintain certain reserve funds in respect of furniture, fixtures, and equipment, taxes, and insurance, and comply with other customary obligations for CMBS real estate financings. Amounts deposited into the specified reserve funds represent restricted cash. In addition, the CMBS Financing obligates the CMBS Properties to apply excess cash flow in certain specified manners, depending on the outstanding principal amount of various tranches of the CMBS loans and other factors. These obligations will limit the amount of excess cash flow from the CMBS Properties that may be distributed to Caesars Entertainment. For example, the CMBS Properties are required to use 100% of excess cash flow to make ongoing mandatory offers on a quarterly basis to purchase CMBS mezzanine loans at discounted prices from the holders thereof. To the extent such offers are accepted, such excess cash flow will need to be so utilized and will not be available for distribution to Caesars Entertainment. To the extent such offers are not accepted with respect to any fiscal quarter, the amount of excess cash flow that may be distributed to Caesars Entertainment is limited to 85% of excess cash flow with respect to such quarter. In addition, the CMBS Financing provides that once the aggregate principal amount of the CMBS mezzanine loans is less than or equal to $625.0 million , the mortgage loan will begin to amortize on a quarterly basis in an amount equal to the greater of 100% of excess cash flow for such quarter and $31.3 million . If the CMBS mortgage loan begins to amortize, the excess cash flow from the CMBS Properties will need to be applied to such amortization and will not be available for distribution to Caesars Entertainment. Derivative Instruments We have an interest rate cap agreement to partially hedge the risk of future increases in the variable rate of the CMBS Financing. The CMBS interest rate cap agreement, which was effective in January 2008 and terminates February 13, 2013 , is for a notional amount of $6,500.0 million at a LIBOR cap rate of 4.5% . In 2010 , we removed the cash flow hedge designation, freezing the amount of deferred losses recorded in accumulated other comprehensive loss ("AOCL") associated with the interest rate cap. Subsequently, we began amortizing deferred losses frozen in AOCL into income over the original remaining term of the hedge forecasted transactions that are still probable of occurring. In each of the years ended December 31, 2012 and 2011 , we recorded $20.9 million as an increase to interest expense, and we will record an additional $2.6 million as an increase to interest expense and AOCL through the termination date, all related to deferred losses on the interest rate cap. At December 31, 2012 , $4,650.2 million of the interest rate cap was redesignated a cash flow hedging instrument for accounting purposes. Any future changes in fair value of the portion of the interest rate cap not designated as a hedging instrument will be recognized in interest expense during the period in which the changes in value occur. The hedging relationship between the CMBS Financing and the interest rate cap has remained effective subsequent to each debt extinguishment. In connection with the extinguishments, we reclassified deferred losses out of AOCL and into interest expense associated with the hedge for which the forecasted future transactions are no longer probable of occurring. 8 In February 2013, in conjunction with exercising the option to extend the maturity of the CMBS Financing to 2014, we entered into a new interest rate cap agreement. The interest rate cap agreement, which is effective from February 13, 2013 and terminates February 13, 2015, is for a notional amount of $4,664.1 million at a LIBOR cap rate of 4.5%. Any future changes in fair value of the interest rate cap will be recognized in interest expense during the period in which the changes in value occur. GUARANTEES OF THIRD-PARTY DEBT AND OTHER OBLIGATIONS AND COMMITMENTS The table below summarizes, as of December 31, 2012 , the CMBS Properties' contractual obligations and other commitments through their respective maturity or ending dates. ____________________ 9 Contractual Obligations (a) Payments due by Period (in millions) Total Less than 1 year 1-3 years 4-5 years Debt, face value (b) $ 4,664.1 $ — $ 4,664.1 $ — Capital lease obligations 8.6 3.6 5.0 — Estimated interest payments (b) 397.8 170.8 227.0 — Operating lease obligations 1.0 0.6 0.4 — Purchase order obligations 14.6 14.6 — — Construction commitments 24.1 24.1 — — Entertainment obligations (c) 25.4 12.1 12.5 0.8 Other contractual obligations 25.7 12.7 8.8 4.2 $ 5,161.3 $ 238.5 $ 4,917.8 $ 5.0 (a) In addition to the contractual obligations disclosed in this table, we have unrecognized tax benefits that, based on uncertainties associated with the items and we are unable to make reasonably reliable estimates of the period of potential cash settlements, if any, with taxing authorities. (b) Assumes the exercise of extension options to move the maturity from 2013 to 2015, subject to certain conditions. (c) Entertainment obligations represent obligations to pay performers that have contracts for future performances at one or more of our properties. Exhibit 99.3 GAMING REGULATORY OVERVIEW General The ownership and operation of casino entertainment facilities are subject to pervasive regulation under the laws, rules and regulations of each of the jurisdictions in which we operate. Gaming laws are based upon declarations of public policy designed to ensure that gaming is conducted honestly, competitively and free of criminal and corruptive elements. Since the continued growth and success of gaming is dependent upon public confidence, gaming laws protect gaming consumers and the viability and integrity of the gaming industry, including prevention of cheating and fraudulent practices. Gaming laws may also be designed to protect and maximize state and local revenues derived through taxation and licensing fees imposed on gaming industry participants and enhance economic development and tourism. To accomplish these public policy goals, gaming laws establish procedures to ensure that participants in the gaming industry meet certain standards of character and fitness, or suitability. In addition, gaming laws require gaming industry participants to: pertaining to gaming. Typically, regulatory environments in the jurisdictions in which we operate are established by statute and are administered by a regulatory agency or agencies with interpretive authority with respect to gaming laws and regulations and broad discretion to regulate the affairs of owners, managers, and persons/entities with financial interests in gaming operations. Among other things, gaming authorities in the various jurisdictions in which we operate: regulations; penalties; regarding their suitability or qualification for licensure; gaming industry participants, securities offerings and debt transactions engaged in by such participants; and • Establish and maintain responsible accounting practices and procedures; • Maintain effective controls over their financial practices, including establishment of minimum procedures for internal fiscal affairs and the safeguarding of assets and revenues; • Maintain systems for reliable record keeping; • File periodic reports with gaming regulators; and • Maintain strict compliance with various laws, regulations and required minimum internal controls • Adopt rules and regulations under the implementing statutes; • Make appropriate investigations to determine if there has been any violation of laws or • Enforce gaming laws and impose disciplinary sanctions for violations, including fines and • Review the character and fitness of participants in gaming operations and make determinations • Grant licenses for participation in gaming operations; • Collect and review reports and information submitted by participants in gaming operations; • Review and approve transactions, such as acquisitions or change-of-control transactions of • Establish and collect fees and/or taxes. Licensing and Suitability Determinations Gaming laws require us, each of our subsidiaries engaged in gaming operations, certain of our directors, officers and employees, and in some cases, our stockholders and holders of our debt securities, to obtain licenses or findings of suitability from gaming authorities. Licenses or findings of suitability typically require a determination that the applicant qualifies or is suitable. Gaming authorities have very broad discretion in determining whether an applicant qualifies for licensing or should be deemed suitable. Subject to certain administrative proceeding requirements, the gaming regulators have the authority to deny any application or limit, condition, restrict, revoke or suspend any license, registration, finding of suitability or approval, or fine any person licensed, registered or found suitable or approved, for any cause deemed reasonable by the gaming authorities. Criteria used in determining whether to grant a license or finding of suitability, while varying between jurisdictions, generally include consideration of factors such as: applicant's gaming facility; In evaluating individual applicants, gaming authorities consider the individual's reputation for good character and criminal and financial history and the character of those with whom the individual associates. Many jurisdictions limit the number of licenses granted to operate gaming facilities within the jurisdiction, and some jurisdictions limit the number of licenses granted to any one gaming operator. For example, in Indiana, state law allows us to only hold two gaming licenses. Licenses under gaming laws are generally not transferable unless the transfer is approved by the requisite regulatory agency. Licenses in many of the jurisdictions in which we conduct gaming operations are granted for limited durations and require renewal from time to time. In Iowa, our ability to continue our casino operations is subject to a referendum every eight years or at any time upon petition of the voters in the county in which we operate; the most recent referendum occurred in 2010. Our New Orleans casino operates under a contract with the Louisiana gaming authorities which extends until 2014, with a ten-year renewal period. There can be no assurance that any of our licenses or any of the above mentioned contracts will be renewed, or with respect to our gaming operations in Iowa, that continued gaming activity will be approved in any referendum. Most jurisdictions have statutory or regulatory provisions that govern the required action that must be taken in the event that a license is revoked or not renewed. For example, under Indiana law, a trustee approved by gaming authorities will assume complete operational control of our riverboat in the event our license is revoked or not renewed, and will be authorized to take any action necessary to sell the property if we are unable to find a suitable buyer within 180 days. In addition to us and our direct and indirect subsidiaries engaged in gaming operations, gaming authorities may investigate any individual or entity having a material relationship to, or material involvement with, any of these entities to determine whether such individual is suitable or should be licensed as a business associate of a gaming licensee. Certain jurisdictions require that any change in our directors or officers, including the directors or officers of our subsidiaries, must be approved by the requisite regulatory agency. Our officers, directors and certain key employees must also file applications with the gaming authorities and may be required to be licensed, qualified or be found suitable in many jurisdictions. Gaming authorities may deny an application for licensing for any cause which they deem reasonable. Qualification and suitability determinations require submission of detailed personal and financial information followed by a thorough investigation. The burden of demonstrating suitability is on the applicant, who must pay all the costs of the investigation. Changes in licensed positions must be reported to gaming authorities and in addition to their authority to deny an application for licensure, qualification or a finding of suitability, gaming authorities have jurisdiction to disapprove of a change in a corporate position. If gaming authorities were to find that an officer, director or key employee fails to qualify or is unsuitable for licensing or unsuitable to continue having a relationship with us, we would have to sever all relationships with such person. In addition, gaming authorities may require us to terminate the employment of any person who refuses to file appropriate applications. • The financial stability, integrity and responsibility of the applicant, including whether the operation is adequately capitalized in the jurisdiction and exhibits the ability to maintain adequate insurance levels; • The quality of the applicant's casino facilities; • The amount of revenue to be derived by the applicable jurisdiction through operation of the • The applicant's practices with respect to minority hiring and training; and • The effect on competition and general impact on the community. Moreover, in many jurisdictions, any of our stockholders or holders of our debt securities may be required to file an application, be investigated, and qualify or have his, her or its suitability determined. For example, under Nevada gaming laws, each person who acquires, directly or indirectly, beneficial ownership of any voting security, or beneficial or record ownership of any non-voting security or any debt security in a public corporation which is registered with the Nevada Gaming Commission (the “Commission”), such as Caesars Entertainment Corporation, may be required to be found suitable if the Commission has reason to believe that his or her acquisition of that ownership, or his or her continued ownership in general, would be inconsistent with the declared public policy of Nevada, in the sole discretion of the Commission. Any person required by the Commission to be found suitable shall apply for a finding of suitability within 30 days after the Commission's request that he or she should do so and, together with his or her application for suitability, deposit with the Nevada Gaming Control Board (the “Board”) a sum of money which, in the sole discretion of the Board, will be adequate to pay the anticipated costs and charges incurred in the investigation and processing of that application for suitability, and deposit such additional sums as are required by the Board to pay final costs and charges. Furthermore, any person required by a gaming authority to be found suitable, who is found unsuitable by the gaming authority, shall not be able to hold directly or indirectly the beneficial ownership of any voting security or the beneficial or record ownership of any nonvoting security or any debt security of any public corporation which is registered with the gaming authority, such as Caesars Entertainment Corporation, beyond the time prescribed by the gaming authority. A violation of the foregoing may constitute a criminal offense. A finding of unsuitability by a particular gaming authority impacts that person's ability to associate or affiliate with gaming licensees in that particular jurisdiction and could impact the person's ability to associate or affiliate with gaming licensees in other jurisdictions. Many jurisdictions also require any person who acquires beneficial ownership of more than a certain percentage of our voting securities and, in some jurisdictions, our non-voting securities, typically 5%, to report the acquisition to gaming authorities, and gaming authorities may require such holders to apply for qualification or a finding of suitability. Most gaming authorities, however, allow an “institutional investor” to apply for a waiver that allows the “institutional investor” to acquire, in most cases, up to 15% of our voting securities without applying for qualification or a finding of suitability. An “institutional investor” is generally defined as an investor acquiring and holding voting securities in the ordinary course of business as an institutional investor, and not for the purpose of causing, directly or indirectly, the election of a majority of the members of our board of directors, any change in our corporate charter, bylaws, management, policies or operations, or those of any of our gaming affiliates, or the taking of any other action which gaming authorities find to be inconsistent with holding our voting securities for investment purposes only. An application for a waiver as an institutional investor requires the submission of detailed information about the company and its regulatory filings, the name of each person that beneficially owns more than 5% of the institutional investor's voting securities or other equivalent and a certification made under oath or penalty for perjury, that the voting securities were acquired and are held for investment purposes only. Even if a waiver is granted, an institutional investor generally may not take any action inconsistent with its status when the waiver was granted without once again becoming subject to the foregoing reporting and application obligations. A change in the investment intent of an institutional investor must be reported to certain regulatory authorities immediately after its decision. Notwithstanding, each person who acquires directly or indirectly, beneficial ownership of any voting security, or beneficial or record ownership of any nonvoting security or any debt security in our company may be required to be found suitable if a gaming authority has reason to believe that such person's acquisition of that ownership would otherwise be inconsistent with the declared policy of the jurisdiction. Generally, any person who fails or refuses to apply for a finding of suitability or a license within the prescribed period after being advised it is required by gaming authorities may be denied a license or found unsuitable, as applicable. The same restrictions may also apply to a record owner if the record owner, after request, fails to identify the beneficial owner. Any person found unsuitable or denied a license and who holds, directly or indirectly, any beneficial ownership of our securities beyond such period of time as may be prescribed by the applicable gaming authorities may be guilty of a criminal offense. Furthermore, we may be subject to disciplinary action if, after we receive notice that a person is unsuitable to be a stockholder or to have any other relationship with us or any of our subsidiaries, we: held by that person; • pay that person any dividend or interest upon our voting securities; • allow that person to exercise, directly or indirectly, any voting right conferred through securities • pay remuneration in any form to that person for services rendered or otherwise; or including, if necessary, the immediate purchase of said voting securities for cash at fair market value. Although many jurisdictions generally do not require the individual holders of debt securities such as notes to be investigated and found suitable, gaming authorities may nevertheless retain the discretion to do so for any reason, including but not limited to, a default, or where the holder of the debt instruments exercises a material influence over the gaming operations of the entity in question. Any holder of debt securities required to apply for a finding of suitability or otherwise qualify must generally pay all investigative fees and costs of the gaming authority in connection with such an investigation. If the gaming authority determines that a person is unsuitable to own a debt security, we may be subject to disciplinary action, including the loss of our approvals, if without the prior approval of the gaming authority, we: exchange, liquidation or similar transaction. Certain jurisdictions impose similar restrictions in connection with debt securities and retain the right to require holders of debt securities to apply for a license or otherwise be found suitable by the gaming authority. Under New Jersey gaming laws, if a holder of our debt or equity securities is required to qualify, the holder may be required to file an application for qualification or divest itself of the securities. If the holder files an application for qualification, it must place the securities in trust with an approved trustee. If the gaming regulatory authorities approve interim authorization, and while the application for plenary qualification is pending, such holder may, through the approved trustee, continue to exercise all rights incident to the ownership of the securities. If the gaming regulatory authorities deny interim authorization, the trust shall become operative and the trustee shall have the authority to exercise all the rights incident to ownership, including the authority to dispose of the securities and the security holder shall have no right to participate in casino earnings and may only receive a return on its investment in an amount not to exceed the actual cost of the investment (as defined by New Jersey gaming laws). If the security holder obtains interim authorization but the gaming authorities later find reasonable cause to believe that the security holder may be found unqualified, the trust shall become operative and the trustee shall have the authority to exercise all rights incident to ownership pending a determination on such holder's qualifications. However, during the period the securities remain in trust, the security holder may petition the New Jersey gaming authorities to direct the trustee to dispose of the trust property and distribute proceeds of the trust to the security holder in an amount not to exceed the lower of the actual cost of the investment or the value of the securities on the date the trust became operative. If the security holder is ultimately found unqualified, the trustee is required to sell the securities and to distribute the proceeds of the sale to the applicant in an amount not exceeding the lower of the actual cost of the investment or the value of the securities on the date the trust became operative and to distribute the remaining proceeds to the state. If the security holder is found qualified, the trust agreement will be terminated. Additionally, following the Reclassification, the Certificates of Incorporation of CEC and CEOC contain provisions establishing the right to redeem the securities of disqualified holders if necessary to avoid any regulatory sanctions, to prevent the loss or to secure the reinstatement of any license or franchise, or if such holder is determined by any gaming regulatory agency to be unsuitable, has an application for a license or permit denied or rejected, or has a previously issued license or permit rescinded, suspended, revoked or not renewed. The Certificates of Incorporation also contain provisions defining the redemption price and the rights of a disqualified security holder. In the event a security holder is disqualified, the New Jersey gaming authorities are empowered to propose any necessary action to protect the public interest, including the suspension or revocation of the licenses for the casinos we own in New Jersey. Many jurisdictions also require that manufacturers and distributors of gaming equipment and suppliers of certain goods and services to gaming industry participants be licensed and require us to purchase and lease gaming equipment, supplies and services only from licensed suppliers. • fail to pursue all lawful efforts to require such unsuitable person to relinquish his voting securities • pay to the unsuitable person any dividend, interest or any distribution whatsoever; • recognize any voting right by the unsuitable person in connection with those securities; • pay the unsuitable person remuneration in any form; or • make any payment to the unsuitable person by way of principal, redemption, conversion Violations of Gaming Laws If we or our subsidiaries violate applicable gaming laws, our gaming licenses could be limited, conditioned, suspended or revoked by gaming authorities, and we and any other persons involved could be subject to substantial fines. Further, a supervisor or conservator can be appointed by gaming authorities to operate our gaming properties, or in some jurisdictions, take title to our gaming assets in the jurisdiction, and under certain circumstances, earnings generated during such appointment could be forfeited to the applicable jurisdictions. Furthermore, violations of laws in one jurisdiction could result in disciplinary action in other jurisdictions. As a result, violations by us of applicable gaming laws could have a material adverse effect on our financial condition, prospects and results of operations. Reporting and Recordkeeping Requirements We are required periodically to submit detailed financial and operating reports and furnish any other information about us and our subsidiaries which gaming authorities may require. Under federal law, we are required to record and submit detailed reports of currency transactions involving greater than $10,000 at our casinos and Suspicious Activity Reports (“SARCs”) if the facts presented so warrant. Some jurisdictions require us to maintain a log that records aggregate cash transactions in the amount of $3,000 or more. We are required to maintain a current stock ledger which may be examined by gaming authorities at any time. We may also be required to disclose to gaming authorities upon request the identities of the holders of our debt or other securities. If any securities are held in trust by an agent or by a nominee, the record holder may be required to disclose the identity of the beneficial owner to gaming authorities. Failure to make such disclosure may be grounds for finding the record holder unsuitable. In Indiana, we are required to submit a quarterly report to gaming authorities disclosing the identity of all persons holding interests of 1% or greater in a riverboat licensee or holding company. Gaming authorities may also require certificates for our stock to bear a legend indicating that the securities are subject to specified gaming laws. In certain jurisdictions, gaming authorities have the power to impose additional restrictions on the holders of our securities at any time. Review and Approval of Transactions Substantially all material loans, leases, sales of securities and similar financing transactions by us and our subsidiaries must be reported to, or approved by, gaming authorities. Neither we nor any of our subsidiaries may make a public offering of securities without the prior approval of certain gaming authorities if the securities or the proceeds therefrom are intended to be used to construct, acquire or finance gaming facilities in such jurisdictions, or to retire or extend obligations incurred for such purposes. Such approval, if given, does not constitute a recommendation or approval of the investment merits of the securities subject to the offering. Changes in control through merger, consolidation, stock or asset acquisitions, management or consulting agreements, or otherwise, require prior approval of gaming authorities in certain jurisdictions. Entities seeking to acquire control of us or one of our subsidiaries must satisfy gaming authorities with respect to a variety of stringent standards prior to assuming control. Gaming authorities may also require controlling stockholders, officers, directors and other persons having a material relationship or involvement with the entity proposing to acquire control, to be investigated and licensed as part of the approval process relating to the transaction. Certain gaming laws and regulations in jurisdictions we operate in establish that certain corporate acquisitions opposed by management, repurchases of voting securities and corporate defense tactics affecting us or our subsidiaries may be injurious to stable and productive corporate gaming, and as a result, prior approval may be required before we may make exceptional repurchases of voting securities (such as repurchases which treat holders differently) above the current market price and before a corporate acquisition opposed by management can be consummated. In certain jurisdictions, the gaming authorities also require prior approval of a plan of recapitalization proposed by the board of directors of a publicly traded corporation which is registered with the gaming authority in response to a tender offer made directly to the registered corporation's stockholders for the purpose of acquiring control of the registered corporation. Because licenses under gaming laws are generally not transferable, our ability to grant a security interest in any of our gaming assets is limited and may be subject to receipt of prior approval from gaming authorities. A pledge of the stock of a subsidiary holding a gaming license and the foreclosure of such a pledge may be ineffective without the prior approval of gaming authorities. Moreover, our subsidiaries holding gaming licenses may be unable to guarantee a security issued by an affiliated or parent company pursuant to a public offering, or pledge their assets to secure payment of the obligations evidenced by the security issued by an affiliated or parent company, without the prior approval of gaming authorities. We are subject to extensive prior approval requirements relating to certain borrowings and security interests with respect to our New Orleans casino. If the holder of a security interest wishes operation of the casino to continue during and after the filing of a suit to enforce the security interest, it may request the appointment of a receiver approved by Louisiana gaming authorities, and under Louisiana gaming laws, the receiver is considered to have all our rights and obligations under our contract with Louisiana gaming authorities. Some jurisdictions also require us to file a report with the gaming authority within a prescribed period of time following certain financial transactions and the offering of debt securities. Were they to deem it appropriate, certain gaming authorities reserve the right to order such transactions rescinded. Certain jurisdictions require the implementation of a compliance review and reporting system created for the purpose of monitoring activities related to our continuing qualification. These plans require periodic reports to senior management of our company and to the regulatory authorities. Certain jurisdictions require that an independent audit committee oversee the functions of surveillance and internal audit departments at our casinos. License Fees and Gaming Taxes We pay substantial license fees and taxes in many jurisdictions, including the counties, cities, and any related agencies, boards, commissions, or authorities, in which our operations are conducted, in connection with our casino gaming operations, computed in various ways depending on the type of gaming or activity involved. Depending upon the particular fee or tax involved, these fees and taxes are payable either daily, monthly, quarterly or annually. License fees and taxes are based upon such factors as: In many jurisdictions, gaming tax rates are graduated with the effect of increasing as gross revenues increase. Furthermore, tax rates are subject to change, sometimes with little notice, and we have recently experienced tax rate increases in a number of jurisdictions in which we operate. A live entertainment tax is also paid in certain jurisdictions by casino operations where entertainment is furnished in connection with the selling or serving of food or refreshments or the selling of merchandise. Operational Requirements In many jurisdictions, we are subject to certain requirements and restrictions on how we must conduct our gaming operations. In many jurisdictions, we are required to give preference to local suppliers and include minority-owned and women-owned businesses in construction projects to the maximum extent practicable. Some jurisdictions also require us to give preferences to minority-owned and women-owned businesses in the procurement of goods and services. Some of our operations are subject to restrictions on the number of gaming positions we may have, the minimum or maximum wagers allowed by our customers, and the maximum loss a customer may incur within specified time periods. Our land-based casino in New Orleans operates under a contract with the Louisiana Gaming Control Board and the Louisiana Economic Development and Gaming Act and related regulations. Under this authority, our New Orleans casino is subject to not only many of the foregoing operational requirements, but also to restrictions on our food and beverage operations, including with respect to the size, location and marketing of eating establishments at our casino entertainment facility. Furthermore, with respect to the hotel tower, we are subject to restrictions on the number of rooms within the hotel, the amount of meeting space within the hotel and how we may market and advertise the rates we charge for rooms. In Mississippi, we are required to include adequate parking facilities (generally 500 spaces or more) in close proximity to our existing casino complexes, as well as infrastructure facilities, such as hotels, that will amount to at least 25% of the casino cost. The infrastructure requirement was increased to 100% of the casino cost for any new casinos in Mississippi. To comply with requirements of Iowa gaming laws, we have entered into management agreements with Iowa West Racing Association, a non-profit organization. The Iowa Racing and Gaming Commission has issued a joint license to Iowa West Racing Association and Harveys Iowa Management Company, Inc. for the operation of the Harrah's Council Bluffs Casino, which is an excursion gambling boat that is now permanently moored, and issued a license for the Horseshoe Council Bluffs Casino at Bluffs Run Greyhound Park which is a full service, land based casino and a greyhound racetrack. The company operates both facilities pursuant to the management agreements. • a percentage of the gross revenues received; • the number of gaming devices and table games operated; • franchise fees for riverboat casinos operating on certain waterways; and • admission fees for customers boarding our riverboat casinos. The United Kingdom Gambling Act of 2005 which became effective in September 2007, replaced the Gaming Act 1968, and removed most of the restrictions on adverting. Though the 2005 Act controls marketing, advertising gambling is now controlled by the Advertising Standards Authority through a series of codes of practise. Known as the CAP codes, the codes offer guidance on the content of print, television and radio advertisements. Indian Gaming The terms and conditions of management contracts and the operation of casinos and all gaming on Indian land in the United States are subject to the Indian Gaming Regulatory Act of 1988, (the “IGRA”), which is administered by the National Indian Gaming Commission, (the “NIGC”), the gaming regulatory agencies of tribal governments, and Class III gaming compacts between the tribes for which we manage casinos and the states in which those casinos are located. IGRA established three separate classes of tribal gaming-Class I, Class II and Class III. Class I includes all traditional or social games solely for prizes of minimal value played by a tribe in connection with celebrations or ceremonies. Class II gaming includes games such as bingo, pulltabs, punchboards, instant bingo and non-banked card games (those that are not played against the house) such as poker. Class III gaming includes casino-style gaming such as banked table games like blackjack, craps and roulette, and gaming machines such as slots and video poker, as well as lotteries and pari-mutuel wagering. Harrah's Ak-Chin Phoenix and Rincon provide Class II gaming and, as limited by the tribal-state compact, Class III gaming. The Eastern Band Cherokee Casino currently provides only Class III gaming. IGRA prohibits all forms of Class III gaming unless the tribe has entered into a written agreement or compact with the state that specifically authorizes the types of Class III gaming the tribe may offer. These compacts may address, among other things, the manner and extent to which each state will conduct background investigations and certify the suitability of the manager, its officers, directors, and key employees to conduct gaming on tribal lands. We have received our permanent certification from the Arizona Department of Gaming as management contractor for the Ak-Chin Indian Community's casino, a Tribal-State Compact Gaming Resource Supplier Finding of Suitability from the California Gambling Control Commission in connection with management of the Rincon San Luiseno Band of Indians casino, and have been licensed by the relevant tribal gaming authorities to manage the Ak-Chin Indian Community's casino, the Eastern Band of Cherokee Indians' casino and the Rincon San Luiseno Band of Indians' casino, respectively. IGRA requires NIGC approval of management contracts for Class II and Class III gaming as well as the review of all agreements collateral to the management contracts. Management contracts which are not so approved are void. The NIGC will not approve a management contract if a director or a 10% stockholder of the management company: purchasing or leasing the games; to effective gaming regulation and control, or create or enhance the chance of unsuitable activities in gaming or the business and financial arrangements incidental thereto. In addition, the NIGC will not approve a management contract if the management company or any of its agents have attempted to unduly influence any decision or process of tribal government relating to gaming, or if the management company has materially breached the terms of the management contract or the tribe's gaming ordinance, or a trustee, exercising due diligence, would not approve such management contract. A management contract can be approved only after the NIGC determines that the contract provides, among other things, for: tribe; gross revenues and income; • is an elected member of the Native American tribal government which owns the facility • has been or is convicted of a felony gaming offense; • has knowingly and willfully provided materially false information to the NIGC or the tribe; • has refused to respond to questions from the NIGC; or • is a person whose prior history, reputation and associations pose a threat to the public interest or • adequate accounting procedures and verifiable financial reports, which must be furnished to the • tribal access to the daily operations of the gaming enterprise, including the right to verify daily development and construction costs; revenues (as determined by the NIGC); provided that the NIGC may approve up to a seven year term and a management fee not to exceed 40% of net revenues if NIGC is satisfied that the capital investment required, and the income projections for the particular gaming activity require the larger fee and longer term. Management contracts can be modified or cancelled pursuant to an enforcement action taken by the NIGC based on a violation of the law or an issue affecting suitability. Indian tribes are sovereign with their own governmental systems, which have primary regulatory authority over gaming on land within the tribes' jurisdiction. Therefore, persons engaged in gaming activities, including the company, are subject to the provisions of tribal ordinances and regulations on gaming. These ordinances are subject to review by the NIGC under certain standards established by IGRA. The NIGC may determine that some or all of the ordinances require amendment, and that additional requirements, including additional licensing requirements, may be imposed on us. The possession of valid licenses from the Ak-Chin Indian Community, the Eastern Band of Cherokee Indians and the Rincon San Luiseno Band of Mission Indians, are ongoing conditions of our agreements with these tribes. Riverboat Casinos In addition to all other regulations applicable to the gaming industry generally, some of our riverboat casinos are also subject to regulations applicable to vessels operating on navigable waterways, including regulations of the U.S. Coast Guard. These requirements set limits on the operation of the vessel, mandate that it must be operated by a minimum complement of licensed personnel, establish periodic inspections, including the physical inspection of the outside hull, and establish other mechanical and operational rules. Racetracks We own a full service casino which includes a full array of table games in conjunction with a greyhound racetrack in Council Bluffs, Iowa. The casino operation and the greyhound racing operation are regulated by the same state agency and are subject to the same regulatory structure established for all Iowa gaming facilities. A single operating license covers both parts of the operation in Council Bluffs. We also own slot machines at a thoroughbred racetrack in Bossier City, Louisiana, and we own a combination harness racetrack and casino in southeastern Pennsylvania in which the company, through various subsidiary entities, owns a 99.5% interest in the entity licensed by the Pennsylvania Gaming Control Board. Generally, our slot operations at the Iowa racetrack is regulated in the same manner as our other gaming operations in Iowa. In addition, regulations governing racetracks are typically administered separately from our other gaming operations (except in Iowa), with separate licenses and license fee structures. For example, racing regulations may limit the number of days on which races may be held. In Kentucky, we own and operate Bluegrass Downs, a harness racetrack located in Paducah. We have a 20% interest in Rock Ohio Caesars LLC (“ROC”), a venture with Rock Ohio Ventures, LLC (formerly Rock Gaming, LLC) (“Rock”). We divested our interests in Thistledown Racetrack, LLC (“Thistledown”) , a thoroughbred racetrack located in Cleveland, Ohio, which is regulated by the Ohio State Racing Commission and subject to the same regulatory structure established for all Ohio racing facilities. ROC wholly owns the operation and once it commences slot operations we will manage the property for a fee under a management agreement that will expire on the 20th anniversary of commencing such slot operations. We divested our interest in Turfway Park LLC, owner of the Turfway Park thoroughbred racetrack in Boone County, to ROC. Turfway Park LLC also owns a minority interest in Kentucky Downs LLC, which is the owner of the Kentucky Downs racetrack. These Kentucky racetracks are licensed and regulated by the Kentucky Horse Racing Commission and are subject to the same regulatory structure established for all Kentucky racing facilities. • minimum guaranteed payments to the tribe, which must have priority over the retirement of • a ceiling on the repayment of such development and construction costs; and • a contract term not exceeding five years and a management fee not exceeding 30% of net • Internet An affiliate of the Company, Caesars Interactive Entertainment, Inc., engages in lawful real money online internet gaming activity in the United Kingdom through two outside third party operators. This internet gaming is offered to residents of the United Kingdom by the third party operators pursuant to licenses issued to these operators by the Gibraltar Regulatory Authority. Gibraltar is a United Kingdom “white listed” jurisdiction which allows operators to legally advertise online gaming services in the United Kingdom. To date, the key gaming regulatory authorities governing online internet gaming are the Gibraltar Regulatory Authority, the Alderney Gambling Control Commission and the Isle of Mann Gambling Supervision Commission. Italy and France recently legalized online internet gaming by private companies and, in June 2010, Denmark passed legislation legalizing online internet gaming. Caesars Interactive Entertainment, Inc., recently entered into agreements with third parties for the use of the World Series of Poker brand on online gaming websites in Italy and France. In addition, the State of Nevada legalized real money online internet poker within the State. The Nevada Gaming Control Board adopted regulations and established licensing requirements for the operation of real money online internet poker in the State of Nevada. In December 2012, Caesars Interactive Entertainment, Inc., was approved by the Nevada Gaming Commission to hold a license as an Operator of Interactive Gaming. Lastly, we have "play for fun" offerings in other jurisdictions, social games on Facebook and other social media websites, and mobile application platforms.

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