Options to extend lease term

CAESARS ENTERTAINMENT, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)Note 10. Leases The Company has operating and finance leases for various real estate and equipment. Certain of the Company’s lease agreements include rental payments based on a percentage of sales over specified contractual amounts, rental payments adjusted periodically for inflation and rental payments based on usage. The Company’s leases include options to extend the lease term one month to 75 years. The Company’s lease agreements do not contain any material restrictive covenants, other than those described below.Lessee ArrangementsOperating LeasesWe lease real estate and equipment used in our operations from third parties. As of December 31, 2021, the remaining term of our operating leases ranged from 1 to 75 years with various extension options available, if we elect to exercise them. However, our remaining terms only include extension options that we have determined are reasonably certain as of December 31, 2021. In addition to minimum rental commitments, certain of our operating leases provide for contingent rentals based on a percentage of revenues in excess of specified amounts. We do not include costs associated with our non-lease components in our lease costs disclosed in the table below. During the years ended December 31, 2021 and December 31, 2020, we obtained $13 million and $38 million, respectively, of right-of-use (“ROU”) assets in exchange for new lease liabilities.Leases recorded on the balance sheet consist of the following:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (In millions) |  | Classification on the Balance Sheet |  | December 31, 2021 |  | December 31, 2020 |
| Assets: |  |  |  |  |  |  |
| Operating lease ROU assets (a) |  | Other assets, net |  | $ | 662  |  |  | $ | 457  |  |
|  |  |  |  |  |  |  |
| Liabilities: |  |  |  |  |  |  |
| Current operating lease liabilities (a) |  | Accrued other liabilities |  | 49  |  |  | 53  |  |
|  |  |  |  |  |  |  |
| Non-current operating lease liabilities (a) |  | Other long-term liabilities |  | 726  |  |  | 516  |  |
|  |  |  |  |  |  |  |

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_(a)As noted above, we have elected the short-term lease measurement and recognition exemption and do not establish ROU assets or liabilities for operating leases with terms of 12 months or less.

|  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |
| Lease Terms and Discount Rate | December 31, |
|  | 2021 |  | 2020 |
| Weighted Average Remaining Lease Term (in years) | 28.8 |  | 25.6 |
|  |  |  |  |
|  |  |  |  |
| Weighted Average Discount Rate | 8.1  | % |  | 8.4  | % |
|  |  |  |  |
|  |  |  |  |



|  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |
| Components of Lease Expense |  |  |  |  |
|  |  | Years Ended December 31, |
| (In millions) |  | 2021 |  | 2020 |
|  |  |  |  |  |
| Operating lease expense |  | $ | 128  |  |  | $ | 53  |  |
| Short-term and variable lease expense |  | 104  |  |  | 50  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
| Total operating lease costs |  | $ | 232  |  |  | $ | 103  |  |

Supplemental cash flow information related to leases is as follows:

|  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |
| Cash payments included in the measurement of lease liabilities |  |  |  |
|  | Years Ended December 31, |
| (In millions) | 2021 |  | 2020 |
|  |  |  |  |
| Operating cash flows for operating leases | $ | 96  |  |  | $ | 49  |  |
|  |  |  |  |

[Table of Contents](#i37dfc5eabc12461dbfc5ef573d80947e_7)91
