— Deferred Compensation and Employee Benefit Plans

Deferred Compensation

Deferred Compensation Plans

As of December 31, 2015, certain current and former employees of Caesars, and our subsidiaries and affiliates, have balances under the Harrah’s Entertainment, Inc. Executive Supplemental Savings Plan (“ESSP”), the Harrah’s Entertainment, Inc. Executive Supplemental Savings Plan II (“ESSP II”), the Park Place Entertainment Corporation Executive Deferred Compensation Plan, the Harrah’s Entertainment, Inc. Deferred Compensation Plan, and the Harrah’s Entertainment, Inc. Executive Deferred Compensation Plan (“EDCP”). These plans are deferred compensation plans that allow certain employees an opportunity to save for retirement and other purposes.

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

Plan obligations in respect of all of these plans were included in Caesars’ financial statements as liabilities prior to the deconsolidation of CEOC. As of December 31, 2015, Caesars has recorded in the accompanying financial statements $44 million in liabilities, representing the estimate of its obligations under the ESSP and ESSP II and for certain former Directors and employees who had employment agreements with Harrah's Entertainment, Inc., (the predecessor to CEC) and participated in the EDCP. The additional liability in respect of the other plans described above that Caesars has not recorded is approximately $29 million, as it was determined that this portion of the liability was attributable to CEOC.

Trust Assets

CEC is a party to a trust agreement and an escrow agreement, each structured as so-called “rabbi trust” arrangements, which hold assets that may be used to satisfy obligations under the deferred compensation plans above. Amounts held pursuant to the trust agreement and the escrow agreement were approximately $64 million and $49 million, respectively as of December 31, 2015.

The assets held pursuant to the trust agreement have been reflected as long-term restricted assets on CEC’s balance sheet. The assets held pursuant to the escrow agreement have not been reflected on CEC’s balance sheet as we continue to assess the escrow agreement and the propriety of the funds that were contributed in accordance with the agreement.

The amounts recorded as assets and liabilities are based upon Caesars’ current conclusions regarding ownership of assets and obligation to pay liabilities in respect of the plans and trust assets described above. These amounts may change as a result of many factors, including but not limited to the following: further analyses by Caesars, events occurring in connection with discussions with CEOC creditors, and CEOC’s Chapter 11 cases. Such changes, if they occur, could eliminate or reduce the assets or liabilities recorded on Caesars’ balance sheet, increase the asset for all or some portion of the assets held pursuant to the escrow agreement, or increase the liabilities not recorded. Caesars believes that it may have claims to all or some portion of the assets held pursuant to the escrow agreement.

Savings and Retirement Plans

We maintain a defined contribution savings and retirement plan that allows employees to make pre-tax and after-tax contributions. Under the plan, participating employees may elect to contribute up to 50% of their eligible earnings (subject to IRS rules and regulations) and are eligible to receive a company match of up to $600. Participating employees become vested in matching contributions on a pro-rata basis over five years of credited service. Our contribution expense for this plan was $6 million, $13 million, and $13 million for the years ended December 31, 2015, 2014, and 2013, respectively.

We maintain several supplemental executive retirement plans (“SERP”) to provide additional retirement benefits to a select group of former executives. The total liability reported in deferred credits and other by CEOC for the SERP plans was $33 million as of December 31, 2014.

Pension Commitments

CEOC has a defined benefit plan for employees of our London Clubs International subsidiary that 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. While consolidated in our results, this plan was accounted for under the immediate recognition method, under which actuarial gains and losses were recognized in operating results in the year in which the gains and losses occurred rather than deferring them into Other Comprehensive Loss and amortizing them over future periods. Any such amounts were recorded in the fourth quarter of each year, and during the fourth quarter of 2014 and 2013, we recognized $21 million and $97 million, respectively.

As of December 31, 2014, total plan assets were $208 million with total projected benefit obligation totaling $293 million, resulting in a net pension liability of $85 million. CEOC net pension liability has been deconsolidated effective January 15, 2015 (see Note 3).

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:


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.”

Multi-employer Pension Plan Participation

		Pension Protection Act Zone Status ⁽¹⁾			Contributions (In millions)
Pension Fund	EIN/Pension Plan Number	2015	2014	FIP/RP Status ⁽²⁾	2015		2014		2013		Surcharge Imposed	Expiration Date of Collective-Bargaining Agreement
Southern Nevada Culinary and Bartenders Pension Plan⁽⁵⁾	88-6016617/001	Green	Green	No	$	16	$	18	$	20	No	May 31, 2018
Pension Plan of the UNITE HERE National Retirement Fund ⁽³⁾⁽⁵⁾	13-6130178/001	Red	Red	Yes	6		14		14		No	March 14, 2015 ⁽⁶⁾
Local 68 Engineers Union Pension Plan⁽⁴⁾⁽⁵⁾	51-0176618/001	Green	Green	No	—		1		2		No	April 30, 2017
NJ Carpenters Pension Fund	22-6174423/001	Yellow	Yellow	Yes	—		—		1		No	April 30, 2017
Painters IUPAT	52-6073909/001	Yellow	Yellow	Yes	1		1		1		No	Various up to April 2017
Other Funds					9		12		12
Total Contributions					$	32	$	46	$	50

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⁽¹⁾

Represents the Pension Protection Act zone status for applicable plan year beginning January 1, 2015, except where noted otherwise. The zone status is based on information that the Company received from the plan administrator and is certified by the plan’s actuary. Among other factors, plans in the red zone are generally less than 65% funded, plans in the yellow zone are between 65% and less than 80% funded, and plans in the green zone are at least 80% funded. All plans detailed in the table above utilized extended amortization provisions to calculate zone status.


⁽²⁾	Indicates plans for which a financial improvement plan (“FIP”) or a rehabilitation plan (“RP”) is either pending or has been implemented.


⁽³⁾	As described in Note 4, in January 2015, the Pension Plan of the UNITE HERE National Retirement Fund voted to expel Caesars Entertainment and its participating subsidiaries from the plan.


⁽⁴⁾	Plan years begin July 1.


⁽⁵⁾	Plan was listed in the pension plans’ Forms 5500 as providing more than 5% of the total contributions for the plan years ended 2014 and 2013 (also the Nevada Resort Association IATSE Local 720 Retirement Plan, which is included in “Other Funds”). At the date the financial statements were issued, Forms 5500 were not available for the plan year ending in 2015.


⁽⁶⁾	The terms of the current agreement continue indefinitely until either party provides appropriate notice of intent to terminate the contract.