8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

May 7, 2014 (May 7, 2014)

Date of Report (Date of earliest event reported)

Caesars Entertainment Corporation

(Exact name of registrant as specified in its charter)

Delaware	001- 10410	62-1411755
(State of Incorporation)	(Commission File Number)	(IRS Employer Identification Number)

Caesars Entertainment

Operating Company, Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-10413	75-1941623
(State of Incorporation)	(Commission File Number)	(IRS Employer Identification Number)

One Caesars Palace Drive

Las Vegas, Nevada 89109

(Address of principal executive offices) (Zip Code)

(702) 407-6000

(Registrant’s telephone number, including area code)

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01 Regulation FD Disclosure.

Caesars Entertainment Corporation (“Caesars Entertainment”) is disclosing under Item 7.01 of this Current Report on Form 8-K the information attached to this report as Exhibit 99.1 (the “Disclosure Material”), which information is incorporated by reference herein. The Disclosure Material, which has not been previously reported, was provided on May 7, 2014 to lenders in connection with Caesars Entertainment Operating Company, Inc.’s (“CEOC”) previously announced amendments it’s seeking to its senior secured credit facilities (the “Bank Amendment”). CEOC is a direct subsidiary of Caesars Entertainment.

The information set forth in this Item 7.01 of this Current Report on Form 8-K, Exhibit 99.1, is being furnished pursuant to Item 7.01 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any of Caesars Entertainment’s or CEOC’s filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the extent expressly set forth by specific reference in such a filing. The filing of this Item 7.01 of this Current Report on Form 8-K shall not be deemed an admission as to the materiality of any information herein that is required to be disclosed solely by reason of Regulation FD.

Forward-Looking Statements

This Current Report on Form 8-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. Caesars Entertainment and CEOC have based these forward-looking statements on its current expectations about future events. Further, statements that include words such as “may,” “will,” “project,” “might,” “expect,” “believe,” “anticipate,” “intend,” “could,” “would,” “estimate,” “continue,” “present,” “preserve,” 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 this filing. 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 filing, are necessarily estimates reflecting the best judgment of Caesars Entertainment’s and CEOC’s 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.

Important factors that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include without limitation:

• access to available and reasonable financing on a timely basis, including CEOC’s new incremental term loan (and related repayment of 2015 maturities) and Bank Amendment which may not be consummated on the terms contemplated or at all;

• shares of CEOC may not be listed in the future and, if they are listed, a market for CEOC shares may never develop;

• the assertion and outcome of litigation or other claims that may be brought against Caesars Entertainment by creditors of CEOC, some of whom have notified Caesars Entertainment of their objection to various transactions undertaken by Caesars Entertainment and its subsidiaries in 2013 and 2014;

• CEOC may not be able to expand its board of directors to include two independent directors;

• the impact of Caesars Entertainment’s substantial indebtedness and the restrictions in Caesars Entertainment’s debt agreements;

• 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 cost savings programs, including the program to increase Caesars Entertainment’s working capital and excess cash by $500 million;

• the previously disclosed sale of Harrah’s New Orleans to Caesars Growth Partners, LLC may not be consummated on the terms contemplated or at all;

• the ability of Caesars Entertainment’s 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;

• the 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 Caesars Entertainment acquires into its operations;

• the potential difficulties in employee retention and recruitment as a result of Caesars Entertainment’s substantial indebtedness, the ongoing downturn in the U.S. regional gaming industry, or any other factor;

• 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;

• severe weather conditions or natural disasters, including losses therefrom, including losses in revenues and damage to property, and the impact of severe weather conditions on Caesars Entertainment’s ability to attract customers to certain of its facilities, such as the amount of losses and disruption to us as a result of Hurricane Sandy in late October 2012;

• 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 or uprisings, including losses therefrom, including losses in revenues and damage to property;

• the effects of environmental and structural building conditions relating to Caesars Entertainment’s properties;

• access to insurance on reasonable terms for Caesars Entertainment’s assets; and

• the impact, if any, of unfunded pension benefits under multi-employer pension plans.

These forward-looking statements should, therefore, be considered in light of various important factors set forth above and from time to time in Caesars Entertainment’s and CEOC’s filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this filing. Caesars Entertainment and CEOC 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 filing or to reflect the occurrence of unanticipated events, except as required by law.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits. The following exhibit is being furnished herewith:

Exhibit No.	Description
99.1	Disclosure Material.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CAESARS ENTERTAINMENT CORPORATION
Date: May 7, 2014	By:	/s/ Donald A. Colvin
	Name:	Donald A. Colvin
	Title:	Executive Vice President and Chief Financial Officer
	CAESARS ENTERTAINMENT OPERATING COMPANY, INC.
Date: May 7, 2014	By:	/s/ Donald A. Colvin
	Name:	Donald A. Colvin
	Title:	Executive Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Disclosure Material.

EX-99.1

Exhibit 99.1

Sources & Uses and Pro Forma Capitalization

Sources & Uses
($ in millions)
				% of
Sources	Amount			total
Term Loan B7	$	1,750			91	%
Cash		176			9	%
Total sources	$	1,926			100	%
				% of
Uses	Amount			total
Repay 2015 Senior Notes	$	792	(1)		41	%
Repay 2015 Second Lien Notes		215			11	%
Repay Term Loan B1-B3		29			2	%
Repay Term Loan B4		400			21	%
Fees to Consenting Lenders		50			3	%
Paydown to Consenting Lenders and/or B4 Lenders		400			21	%
Estimated Fees, Expenses and OID		40			2	%
Total uses	$	1,926			100	%

CEOC Pro Forma Capitalization
($ in millions)
	As of December 31, 2013
	Pro Forma (2)			Adjustments			Adjusted
Capitalization
Cash and Cash Equivalents	$	3,200	(3)		(176	)	$	3,024
Revolver		—						—
Term Loans B1-B3		29			(29	)		—
Term Loan B4		960			(400	)		560
Term Loan B5		992			(116	)(4)		876
Term Loan B6		2,432			(284	)(4)		2,148
New Term Loan B7		—			1,750			1,750
Total Bank Debt	$	4,413					$	5,334
Other First Lien Debt		6,362			—			6,362
Total First Lien Debt	$	10,774					$	11,695
Senior Lien Notes due 2015		215			(215	)		—
Other Second Lien Notes		5,608			—			5,608
Total Secured Debt	$	16,597					$	17,303
Senior Notes due 2015		792			(792	)(1)		—
Other Debt		2,015						2,015
Total Debt	$	19,404					$	19,318
LTM Adj. EBITDA - PF (5)	$	1,084					$	1,084
Credit Statistics
Net First Lien Leverage		7.0x						8.0x
Net Secured Leverage		12.4x						13.2x
Total Net Leverage		14.9x						15.0x

(1) Includes $428 million of the 5.625% Senior Notes due 2015 currently held by CGP.

(2) Pro forma for sale of four casino properties to CGP.

(3) Pro forma cash does not include certain working capital adjustments related to the sale of properties to CGP.

(4) Assumes 100% consent for Term Loan B5 and B6 lenders, and 0% consent for Term Loan B4 lenders. Paydown will be allocated on a pro rata basis based on principal amounts of Term Loan B5 and B6.

(5) LTM Adjusted EBITDA – Pro Forma – CEOC Restricted, as reported, less the midpoint of adjusted EBITDA guidance of $145 to $175 million for the four casino properties sold to CGP.

Reconciliation of Net (Loss)/Income attributable to CEOC to Adjusted EBITDA

($ in millions)
	2013
Net loss attributable to CEOC	($	2,875.5	)
Interest expense, net of interest income		2,129.8
Benefit for income taxes (1)		(680.3	)
Depreciation and amortization (2)		538.6
EBITDA	($	887.4	)
Project opening costs, abandoned projects and development costs (3)	$	67.1
Acquisition and integration costs (4)		13.4
Loss on early extinguishment of debt (5)		32.1
Net loss attributable to noncontrolling interests, net of (distributions) (6)		(6.7	)
Impairments of intangible and tangible assets (7)		1,954.4
Non-cash expense for stock compensation benefits (8)		34.4
Adjustments for recoveries from insurance claims for flood losses (9)		—
Loss/(gain) on sale of discontinued operations (10)		0.7
Gain on sale on partial sale of subsidiary (11)		(44.1	)
Adjustments to include 100% of Baluma S.A.’s adjusted EBITDA (12)		9.0
Other items (13)		96.3
Other adjustments for failed sale impact		(5.6	)
Adjusted EBITDA	$	1,263.6
Pro Forma adjustments related to properties (14)	$	5.6
Pro Forma adjustment for estimated cost savings yet-to-be-realized (15)		74.8
LTM Adjusted EBITDA-Pro Forma	$	1,344.0
LTM Adjusted EBITDA-Pro Forma of CEOC’s unrestricted subsidiaries	($	99.6	)
LTM Adjusted EBITDA-Pro Forma - CEOC Restricted	$	1,244.4

(1) Amounts include the provision for income taxes related to discontinued operations of $45.5 million for the three months ended December 31, 2012, and the provision for income taxes related to discontinued operations of $0.2 million and $50.1 million for the year ended December 31, 2013 and 2012, respectively. There was no provision for income taxes related to discontinued operations for the three months ended December 31, 2013.

(2) Amounts include depreciation and amortization related to discontinued operations of $9.9 million for the three months ended December 31, 2012, and depreciation and amortization related to discontinued operations of $0.2 million and $29.0 million for the year ended December 31, 2013 and 2012, respectively. There was $0.0 million depreciation and amortization related to discontinued operations for the three months ended December 31, 2013.

(3) Amounts represent pre-opening costs incurred in connection with new property openings and expansion projects at existing properties, as well as any non-cash write-offs of abandoned development projects. Amounts include reserves related to the closure of Alea Leeds in March 2013, which are included in loss from discontinued operations of $15.8 million for the year ended December 31, 2013. There were no reserves related to discontinued operations for the three months ended December 31, 2013 and 2012 or for the year ended December 31, 2012.

(4) Amounts include certain costs associated with acquisition and development activities and reorganization activities which are infrequently occurring costs.

(5) Amounts represent the difference between the fair value of consideration paid and the book value, net of deferred financing costs, of debt retired through debt extinguishment transactions, which are capital structure-related, rather than operational-type costs.

(6) Amounts represent minority owners’ share of income/(loss) from the Company’s majority-owned consolidated subsidiaries, net of cash distributions to minority owners, which is a non-cash item as it excludes any cash distributions.

(7) Amounts represent non-cash charges to impair intangible and tangible assets primarily resulting from changes in the business outlook in light of economic conditions, includes the follow amounts related to discontinued operations: an impairment charge of $0.3 million for the three months ended December 31, 2013, an impairment recovery of $9.2 million for the year ended December 31, 2013, and an impairment charge of $121.8 million for the year ended December 31, 2012. There were no impairment charges related to discontinued operations for the three months ended December 31, 2012.

(8) Amounts represent non-cash stock-based compensation expense related to stock options and restricted stock granted to the Company’s employees.

(9) Amounts represent adjustments for insurance claims related to lost profits during the floods that occurred in 2011.

(10) Amounts represent adjustments to include 100% of Baluma S.A. (Punta del Este) adjusted EBITDA as permitted under the indentures governing CEOC’s existing notes and the credit agreement governing CEOC’s senior secured credit facilities.

(11) Amount represents the gain recognized on the sale of the Harrah’s St. Louis casino.

(12) Amounts represent the gain recognized on the sale of 45% of Baluma S.A. (Punta del Este) to Enjoy S.A.

(13) Amounts represent add-backs and deductions from EBITDA, whether permitted and/or required under the indentures governing CEOC’s existing notes and the credit agreement governing CEOC’s senior secured credit facilities, included in arriving at LTM Adjusted EBITDA-Pro Forma but not separately identified. Such add-backs and deductions include litigation awards and settlements, severance and relocation costs, sign-on and retention bonuses, permit remediation costs, gains and losses from disposals of assets, costs incurred in connection with implementing the Company’s efficiency and cost-saving programs, business optimization expenses, the Company’s insurance policy deductibles incurred as a result of catastrophic events such as floods and hurricanes, one time sales tax assessments and accruals, project start-up costs, and non-cash equity in earnings of non-consolidated affiliates (net of distributions),

(14) Amounts represent the estimated annualized impact of operating results related to newly completed construction projects, combined with the estimated annualized EBITDA impact associated with properties acquired during the period.

(15) Amount represents adjustments to reflect the impact of annualized run-rate cost savings and anticipated future cost savings to be realized from profitability improvement and cost-savings programs.

Reconciliation of Net (Loss)/Income attributable to the Four Sold Properties(1) to Adjusted EBITDA
The table below provides a reconciliation of estimated net income attributable to the four casino properties sold from CEOC to CGP(1), its most comparable measure in accordance with GAAP, to estimated Adjusted EBITDA for the year ended December 31, 2013
(1) Includes the Quad (formerly known as the Imperial Palace), Bally’s Las Vegas, Harrah’s New Orleans and The Cromwell (formerly known as Bill’s Gamblin’ Hall & Saloon).
(In millions)
Casino revenues
Net revenues
Adjusted EBITDA
Net income attributable to Purchased Properties
Interest expense, net of interest capitalized and interest income
Provision for income taxes
Depreciation and amortization
EBITDA
Project opening costs, abandoned projects and development costs
Non-cash expense for stock compensation benefits
Other non-recurring or non-cash items
Adjusted EBITDA
2013 (Estimated Range)
Low
High
$ 470.0
680.0
145.0
$ 2.0
33.0
24.0
62.0
121.0
7.0
2.0
15.0
$ 145.0
$ 500.0
720.0
175.0
$ 68.0
26.0
16.0
52.0
162.0
3.0
-
10.0
$ 175.0