CAESARS ENTERTAINMENT, INC. LAS VEGAS, Aug. 4, 2015 /PRNewswire/ -- Caesars Entertainment Corporation (NASDAQ: CZR) today reported second quarter 2015 results as summarized in the discussion below, which highlights certain GAAP and non-GAAP financial measures on a consolidated basis.
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Caesars Entertainment Corporation is primarily a holding company with no independent operations of its own. It owns Caesars Entertainment Resort Properties, LLC ("CERP") and an interest in Caesars Growth Partners, LLC ("CGP"). It also owns 89% of Caesars Entertainment Operating Company, Inc. ("CEOC"). The results of CEOC and its subsidiaries are no longer consolidated with CEC subsequent to CEOC's Chapter 11 filing on January 15. Caesars Enterprise Services, LLC ("CES") provides certain enterprise services to properties owned and/or operated by CERP, CGP and CEOC, and this press release at times refers to system-wide trends and dynamics, inclusive of CEOC and its subsidiaries. In the discussion in this release, the word "CEC" refers to Caesars Entertainment Corporation without its consolidated entities, and the words "Company," "Caesars," "Caesars Entertainment," "Continuing CEC," "we," and "our" refer to Caesars Entertainment Corporation and its consolidated entities, and not CEOC unless otherwise stated or the context requires otherwise.
"Second quarter performance system-wide was strong, delivering the best quarterly EBITDA margins since 2007," said Mark Frissora, President and CEO of Caesars Entertainment. "These results demonstrate our ability to deliver growth while driving operational efficiencies. We are focused on growing the business, continually improving efficiency and expanding margins. To support further improvements in profitability, we plan to invest more in our hospitality assets across the system, which generate some of the highest capital returns across the Total Rewards network of properties."
Highlights
-- Net revenues for Continuing CEC increased 17.4% year-over-year to $1,141
million mainly due to strong performance at Caesars Interactive
Entertainment ("CIE"), the openings of Horseshoe Baltimore and The
Cromwell, the renovation of The LINQ Hotel & Casino and continued growth
in hospitality amenities in Las Vegas.
-- Adjusted EBITDA for Continuing CEC grew 55.6% year-over-year to $347
million primarily driven by marketing and operational efficiencies and
other EBITDA enhancing initiatives, which resulted in strong flow
through from top-line growth.
-- CERP results reflect increased gaming revenues due to increases in slot
revenue and favorable hold year-over-year in Las Vegas, higher room
revenues driven by cash ADR growth, and improved hotel and food and
beverage margins.
-- CGP performance attributable to record results in its social and mobile
games business, the additions of Horseshoe Baltimore and Cromwell and
the renovation of The LINQ Hotel & Casino.
Effective January 15, 2015, CEC deconsolidated CEOC subsequent to its voluntarily filing for reorganization under Chapter 11 of the United States Bankruptcy Code. As such, all amounts presented in this earnings release exclude the operating results of CEOC subsequent to January 15, 2015. Prior period results have not been recast to reflect the deconsolidation of CEOC.
Because CEOC operating results for 2015 are not comparable with 2014 as a result of CEOC's deconsolidation, the analysis of our operating results in this release will include discussion of the components that remain in the consolidated CEC entity subsequent to the deconsolidation of CEOC. In the table below, "Continuing CEC" represents CERP, CGP Casinos, CIE, and associated parent company and elimination adjustments that represent the Caesars structure as of June 30, 2015, and for subsequent periods.
Supplemental materials have been posted on the Caesars Entertainment Investor Relations website at http://investor.caesars.com/financials.cfm.
Three Months Ended June 30, Continuing
CEC
Change %
-------
2015 2014
---- ----
(Dollars in millions,
except per share
data) Continuing CEOC (5) Reported Continuing CEOC (5) Reported
CEC (4) CEC CEC (4) CEC
--- ------ --- ------ ---
Casino revenues (1) $543 $ - $543 $458 $879 $1,337 18.6%
Net revenues (1) 1,141 - 1,141 972 1,168 2,140 17.4%
Income from operations
(1) 186 - 186 79 48 127 135.4%
Gain on
deconsolidation of
subsidiary 7 - 7 - - - *
Income/(loss) from
continuing
operations, net of
income taxes (1) 50 - 50 (30) (357) (387) *
Loss from discontinued
operations, net of
income taxes - - - (16) (29) (45) 100.0%
Net income/(loss)
attributable to
Caesars 15 - 15 (91) (375) (466) *
Basics earnings/
(loss) per share - - 0.10 - - (3.24) -
Diluted earnings/
(loss) per share - - 0.10 - - (3.24) -
Property EBITDA
(2)(10) 351 - 351 256 217 473 37.1%
Adjusted EBITDA (3) 347 - 347 223 232 455 55.6%
Six Months Ended June 30, Continuing
CEC
Change %
-------
2015 2014
---- ----
(Dollars in millions,
except per share
data) Continuing CEOC (5) Reported Continuing CEOC (5) Reported
CEC (4) CEC CEC (4) CEC
--- ------ --- ------ ---
Casino revenues (1) $1,085 $118 $1,203 $903 $1,735 $2,638 20.2%
Net revenues (1) 2,237 158 2,395 1,877 2,296 4,173 19.2%
Income from operations
(1) 321 9 330 193 84 277 66.3%
Gain on
deconsolidation of
subsidiary 7,096 - 7,096 - - - *
Income/(loss) from
continuing
operations, net of
income taxes (1) 6,932 (78) 6,854 24 (711) (687) *
Loss from discontinued
operations, net of
income taxes - (7) (7) (17) (112) (129) 100.0%
Net income/(loss)
attributable to
Caesars 6,872 (85) 6,787 (39) (814) (853) *
Basics earnings/
(loss) per share - - 46.89 - - (6.06) -
Diluted earnings/
(loss) per share - - 46.27 - - (6.06) -
Property EBITDA
(2)(10) 660 31 691 469 416 885 40.7%
Adjusted EBITDA (3) 648 34 682 457 422 879 41.8%
See footnotes following
Balance Sheet and Other
Items later in this
release.
Second Quarter 2015 Financial Results
We view each casino property and CIE as operating segments and aggregate all such casino properties and CIE into four reportable segments based on management's view of these properties. Segment results in this release are presented consistent with the way Caesars management assesses these results, except that for financial reporting purposes our results exclude CEOC results subsequent to its deconsolidation. Segment results in this release are adjusted for the impact of certain transactions between reportable segments within Caesars. Therefore, the results of certain reportable segments presented in this release differ from the financial statement information presented in their separate filings. All comparisons are to the same period from the previous year.
Net Revenues (Reportable Segments)
Three Months Ended June 30, Percent Six Months Ended June 30, Percent
Favorable/ Favorable/
(Unfavorable) (Unfavorable)
-------------
(Dollars in millions) 2015 2014 2015 2014
-------------------- ---- ----
CERP $566 $538 5.2% $1,095 $1,030 6.3%
CGP Casinos (6) 390 294 32.6% 780 586 33.1%
CIE (7) 186 145 28.8% 363 269 34.9%
Other (8) (1) (5) 80.0% (1) (8) 87.5%
Total Continuing CEC 1,141 972 17.4% 2,237 1,877 19.2%
----- --- ---- ----
CEOC (9) - 1,229 * $164 $2,410 *
Other (8) - (61) * (6) (114) *
Total CEOC - 1,168 * 158 2,296 *
--- ----- --- --- ----- ---
Total Reported CEC $1,141 $2,140 * $2,395 $4,173 *
====== ====== === ====== ====== ===
Income/(Loss) from Operations (Reportable Segments)
Three Months Ended June 30, Percent Six Months Ended June 30, Percent
Favorable/ Favorable/
(Unfavorable) (Unfavorable)
------------ ------------
(Dollars in millions) 2015 2014 2015 2014
-------------------- ---- ----
CERP $126 $69 82.6% $233 $128 82.0%
CGP Casinos (6) 44 48 (8.3)% 208 8 *
CIE (7) 54 (3) * 95 1 *
Other (8) (38) (35) (8.6)% (215) 56 *
Total Continuing CEC 186 79 135.4% 321 193 66.3%
--- --- ----- ----
CEOC (9) - 59 * $9 $107 *
Other (8) - (11) * - (23) *
Total CEOC - 48 * 9 84 *
--- --- --- --- --- ---
Total Reported CEC $186 $127 * $330 $277 *
==== ==== === ==== ==== ===
Adjusted EBITDA (Reportable Segments)
Three Months Ended June 30, Percent Six Months Ended June 30, Percent
Favorable/ Favorable/
(Unfavorable) (Unfavorable)
-------------
(Dollars in millions) 2015 2014 2015 2014
-------------------- ---- ---- ---- ----
CERP $182 $128 42.2% $345 $242 42.6%
CGP Casinos (6) 91 61 49.2% 175 131 33.6%
CIE (7) 70 45 55.6% 133 75 77.3%
Other (8) 4 (11) 136.4% (5) 9 *
Total Continuing CEC 347 223 55.6% 648 457 41.8%
--- --- ---- --- --- ----
CEOC (9) - 213 * 34 416 *
Other (8) - 19 * - 6 *
Total CEOC - 232 * 34 422 *
--- --- --- --- --- ---
Total Reported CEC $347 $455 * $682 $879 *
==== ==== === ==== ==== ===
CERP
CERP owns and operates six casinos in the United States, along with The LINQ promenade and Octavius Tower at Caesars Palace Las Vegas.
Net revenues for the second quarter of 2015 were $566 million, a 5.2% increase. Casino revenues were $299 million in the second quarter 2015, a 6.0% increase primarily driven by higher gaming revenues due to increases in slot revenues and favorable hold year-over-year largely at Paris. Room revenues rose 8.7% in the quarter to $138 million due to a 10.5% increase in cash ADR. Food and beverage revenues in the second quarter of 2015 were $137 million, up 2.2% driven by the ramp up of new outlets.
Income from operations of $126 million was primarily attributable to a reduction in operating expenses associated with operational initiatives and increased marketing efficiencies as well as improved profitability in hotel and food and beverage outlets. Favorable hold year-over-year contributed an additional $8 million in adjusted EBITDA.
CGP Casinos
CGP Casinos owns and operates six casinos in the United States, primarily in Las Vegas.
Net revenues for the second quarter of 2015 were $390 million, a 32.6% increase primarily due to the opening of The Cromwell and Horseshoe Baltimore in the second and third quarters of 2014, respectively, and the room renovation of The LINQ Hotel & Casino, which was completed in the second quarter of 2015. Casino revenues were $245 million in the second quarter of 2015, a 39.2% increase driven by the addition of Horseshoe Baltimore. However, we did experience lower gaming volumes at Harrah's New Orleans, which was impacted by the smoking ban that went into effect in local bars, restaurants and casinos citywide on April 22, 2015. Horseshoe Baltimore performance was also adversely affected by the civil unrest in the city at the end of April and into May. Room revenue increased 26.2% in the quarter to $82 million as a result of the completed new rooms at The LINQ Hotel & Casino. Food and beverage revenues were $66 million in the second quarter of 2015, up 15.8%, primarily from the opening of new outlets at Horseshoe Baltimore, The Cromwell and The LINQ Hotel & Casino.
Income from operations of $44 million was primarily driven by increased revenues and improvements in marketing and operational efficiencies partially offset by increased expenses associated with the openings of Horseshoe Baltimore and The Cromwell and management fees incurred after the acquisition of the four casino properties in May 2014. Horseshoe Baltimore and The Cromwell generated an incremental $12 million in adjusted EBITDA in the quarter.
CIE
CIE, a subsidiary of CGP, owns and operates (1) an online games business providing social and mobile games and (2) the World Series of Poker ("WSOP") and regulated real-money online gaming.
Net revenues for the second quarter of 2015 were $186 million, a 28.8% increase driven primarily by strong organic growth in the social and mobile games business.
Income from operations of $54 million was primarily driven by the income impact of increased revenues.
CEOC and CES
CEOC owns and operates 19 casinos in the United States and nine internationally, most of which are located in England. Managed 15 casinos, which included the six CGP casinos and nine casinos for unrelated third parties. Effective October 2014, substantially all our properties are managed by CES (and the remaining properties will be transitioned upon regulatory approval).
CES is a joint venture among CERP, CEOC, and a subsidiary of CGP for which it provides certain corporate and administrative services to their casino properties, including substantially all of the 28 casinos owned by CEOC and nine casinos owned by unrelated third parties (including three Indian tribes) and manages certain assets for the casinos to which it provides services and the other assets it owns, licenses or controls, and employs certain of the corresponding employees.
Balance Sheet and Other Items
Cash and Available Revolver Capacity
Each of the entities comprising Caesars Entertainment's consolidated financial statements have separate debt agreements with restrictions on usage of the respective entity's capital resources. CGP is a variable interest entity that is consolidated by Caesars Entertainment, but is controlled by its sole voting member, Caesars Acquisition Company ("CAC"). CAC is a managing member of CGP and therefore controls all decisions regarding liquidity and capital resources of CGP. CEOC was deconsolidated effective January 15, 2015, and therefore, has not been included in the table below.
June 30, 2015
-------------
(In millions) CERP CES CGP Parent
------------ ---- --- ------
Cash and cash
equivalents $206 $99 $891 $383
Revolver
capacity 270 - 160 -
Revolver
capacity
drawn or
committed to
letters of
credit (95) - (60) -
---
Total
Liquidity $381 $99 $991 $383
==== === ==== ====
* Not meaningful
(1) Casino
revenues, net
revenues,
income from
operations,
and income/
(loss) from
continuing
operations,
net of income
taxes for all
periods
presented in
the table
above exclude
the results of
CIE RMG BEL
(closed in
August 2014)
and Showboat
Atlantic City
casino (closed
in August
2014) because
these are
presented as
discontinued
operations.
(2) Property EBITDA
is a non-GAAP
financial
measure that
is defined and
reconciled to
its most
comparable
GAAP measure
later in this
release.
Property
EBITDA is
included
because the
Company's
management
uses Property
EBITDA to
measure
performance
and allocate
resources, and
believes that
Property
EBITDA
provides
investors with
additional
information
consistent
with that used
by management.
(3) Adjusted EBITDA
is a non-GAAP
financial
measure that
is defined and
reconciled to
its most
comparable
GAAP measure
later in this
release.
Adjusted
EBITDA is
included
because
management
believes that
Adjusted
EBITDA
provides
investors with
additional
information
that allows a
better
understanding
of the results
of operational
activities
separate from
the financial
impact of
decisions made
for the long-
term benefit
of the
Company.
(4) Includes CERP,
CGP Casinos,
CIE, and
associated
parent company
and
elimination
adjustments
that represent
the CEC
structure as
of June 30,
2015, and for
subsequent
periods.
(5) Includes
eliminations
of
intercompany
transactions
and other
consolidating
adjustments.
(6) CGP Casinos is
comprised of
all
subsidiaries
of CGP
excluding CIE.
Percentage
calculations
are based on
unrounded
dollars.
(7) CIE is
comprised of
the
subsidiaries
that operate
its social and
mobile games
business and
WSOP.
Percentage
calculations
are based on
unrounded
dollars.
(8) Other includes
parent,
consolidating,
and other
adjustments to
reconcile to
consolidated
CEC results.
(9) CEOC results
present the
sales of The
Cromwell,
Bally's Las
Vegas, The
LINQ Hotel &
Casino, and
Harrah's New
Orleans to CGP
in May 2014 as
if they had
occurred as of
the earliest
period
presented,
consistent
with internal
management
presentation.
(10) Property EBITDA
presented for
Continuing CEC
includes
associated
parent company
and
elimination
adjustments of
$14 million
and $22
million for
the three and
six months
ended June 30,
2015,
respectively,
and $14
million and
$17 million
for the three
and six months
ended June 30,
2014,
respectively.
Property
EBITDA
presented for
CEOC includes
associated
parent company
and
elimination
adjustments of
negative $22
million and
$64 million
for the three
and six months
ended June 30,
2014,
respectively.
Conference Call Information
Caesars Entertainment Corporation (NASDAQ: CZR) will host a conference call at 2:00 p.m. Pacific Time Tuesday, August 4, 2015, to discuss its second quarter results, certain forward-looking information and other matters related to Caesars Entertainment Corporation, including certain financial and other information regarding CEC's deconsolidated subsidiary Caesars Entertainment Operating Company, Inc. The press release, webcast, and presentation materials will be available on the Investor Relations section of www.caesars.com.
If you would like to ask questions and be an active participant in the call, you may dial 877-637-3723, or 832-412-1752 for international callers, and enter Conference ID 82745497 approximately 10 minutes before the call start time. A recording of the live call will be available on the Company's website for 90 days after the event.
Supplemental materials have been posted on the Caesars Entertainment Investor Relations website at http://investor.caesars.com/financials.cfm.
About Caesars
Caesars Entertainment is the world's most diversified casino-entertainment provider and the most geographically diverse U.S. casino-entertainment company. CEC is mainly comprised of the following three entities: wholly owned Caesars Entertainment Resort Properties ("CERP"), Caesars Growth Partners, LLC ("CGP"), in which we hold a variable economic interest, and the majority owned operating subsidiary Caesars Entertainment Operating Company ("CEOC") (which was deconsolidated effective January 15, 2015 due to its bankruptcy filing). Since its beginning in Reno, Nevada, 77 years ago, CEC has grown through development of new resorts, expansions and acquisitions. The Caesars system of properties now operates 49 casinos in 14 U.S. states and five countries. CERP and CGP operate a total of 12 casinos. CEC's resorts operate primarily under the Caesars®, Harrah's®, and Horseshoe® brand names. CEOC's portfolio also includes the Caesars Entertainment UK (formerly London Clubs International) family of casinos.
The Caesars system of properties is focused on building loyalty and value with its guests through a unique combination of great service, excellent products, unsurpassed distribution, operational excellence, and technology leadership. The Company is committed to system-wide environmental sustainability and energy conservation and recognizes the importance of being a responsible steward of the environment. For more information, please visit www.caesars.com.
Forward Looking Information
This release includes "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. You can identify these statements 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, these statements contain words such as "continue," "focus," "will," "expect," "believe," or "position", or the negative or other variations thereof or comparable terminology. In particular, they include statements relating to, among other things, future actions, new projects, strategies, future performance, the outcomes of contingencies, such as legal proceedings, the restructuring of CEOC, and future financial results of Caesars. These forward-looking statements are based on current expectations and projections about future events.
Investors are cautioned that forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties that cannot be predicted or quantified, and, consequently, the actual performance of Caesars may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to, the following factors, and other factors described from time to time in the Company's reports filed with the Securities and Exchange Commission (including the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained therein):
-- the outcome of currently pending or threatened litigation and demands
for payment by certain creditors against CEC;
-- the effects of CEOC's bankruptcy filing on CEOC and its subsidiaries and
affiliates, including Caesars Entertainment, and the interest of various
creditors, equity holders, and other constituents;
-- the ability to retain key employees during the restructuring of CEOC;
-- the event that the Restructuring Support and Forbearance Agreements
("RSAs") may not be consummated in accordance with its terms, or persons
not party to the RSAs may successfully challenge the implementation
thereof;
-- the length of time CEOC will operate in the Chapter 11 cases or CEOC's
ability to comply with the milestones provided by the RSAs;
-- risks associated with third party motions in the Chapter 11 cases, which
may hinder or delay CEOC's ability to consummate the restructuring as
contemplated by the RSAs;
-- the potential adverse effects of Chapter 11 proceedings on Caesars
Entertainment's liquidity or results of operations;
-- 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;
-- the financial results of CGP's business;
-- the impact of our substantial indebtedness and the restrictions in our
debt agreements;
-- access to available and reasonable financing on a timely basis,
including the ability of the company to refinance its indebtedness on
acceptable terms;
-- 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 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;
-- litigation outcomes and judicial and governmental body actions,
including gaming legislative action, referenda, federal and state
regulatory disciplinary actions, the outcome of the National Retirement
Fund dispute, and fines and taxation;
-- acts of war or terrorist incidents, severe weather conditions, uprisings
or natural disasters, including losses therefrom, 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;
-- the effects of environmental and structural building conditions relating
to our properties;
-- access to insurance on reasonable terms for our assets; and
-- the impact, if any, of unfunded pension benefits under multi-employer
pension plans.
Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, speak only as of the date made. Caesars disclaims any obligation to update the forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated or, if no date is stated, as of the date of this release.
CAESARS ENTERTAINMENT CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
(In millions, except per share
data) Three Months Ended June 30, Six Months Ended June 30,
------------------------------ --------------------------- -------------------------
2015 2014 2015 2014
---- ---- ---- ----
Revenues
Casino $543 $1,337 $1,203 $2,638
Food and beverage 203 377 429 750
Rooms 221 306 443 614
Interactive entertainment 186 145 363 269
Management fees - 15 2 28
Other 121 168 235 304
Reimbursable management costs - 68 9 129
Less: casino promotional
allowances (133) (276) (289) (559)
---- ---- ---- ----
Net revenues 1,141 2,140 2,395 4,173
----- ----- ----- -----
Operating expenses
Direct
Casino 278 791 634 1,579
Food and beverage 99 175 202 333
Rooms 57 80 113 160
Platform fees 51 41 100 76
Property, general,
administrative, and other 305 510 646 1,004
Reimbursable management costs - 68 9 129
Depreciation and amortization 96 157 198 305
Write-downs, reserves, and
project opening costs, net of
recoveries 24 52 66 76
Impairment of tangible and
other intangible assets - 17 - 50
Corporate expense 45 68 91 119
Acquisition and integration
costs and other - 54 6 65
---
Total operating expenses 955 2,013 2,065 3,896
--- ----- ----- -----
Income from operations 186 127 330 277
Interest expense (147) (654) (384) (1,246)
Gain on deconsolidation of
subsidiary and other gains/
(losses) 7 (27) 7,096 (27)
--- --- ----- ---
Income/(loss) from continuing
operations before income
taxes 46 (554) 7,042 (996)
Income tax benefit/(provision) 4 167 (188) 309
--- --- ---- ---
Income/(loss) from continuing
operations, net of income
taxes 50 (387) 6,854 (687)
Discontinued operations
Loss from discontinued
operations - (47) (7) (142)
Income tax benefit/(provision) - 2 - 13
--- ---
Loss from discontinued
operations, net of income
taxes - (45) (7) (129)
--- --- --- ----
Net income/(loss) 50 (432) 6,847 (816)
Net income attributable to
noncontrolling interests (35) (34) (60) (37)
Net income/(loss)
attributable to Caesars $15 $(466) $6,787 $(853)
=== ===== ====== =====
Earnings/(loss) per share - basic and diluted
Basic earnings/(loss) per
share from continuing
operations $0.10 $(2.92) $46.93 $(5.15)
Basic loss per share from
discontinued operations - (0.32) (0.04) (0.91)
--- ----- ----- -----
Basic earnings/(loss) per
share $0.10 $(3.24) $46.89 $(6.06)
===== ====== ====== ======
Diluted earnings/(loss) per
share from continuing
operations $0.10 $(2.92) $46.31 $(5.15)
Diluted loss per share from
discontinued operations - (0.32) (0.04) (0.91)
Diluted earnings/(loss) per
share $0.10 $(3.24) $46.27 $(6.06)
===== ====== ====== ======
CAESARS ENTERTAINMENT CORPORATION
CONSOLIDATED CONDENSED SUMMARY BALANCE SHEETS
(UNAUDITED)
(In millions)
June 30, 2015 December 31, 2014
------------- -----------------
Assets
Current assets
Cash and cash equivalents $1,579 $2,806
Restricted cash 67 76
Other current assets 376 791
--- ---
Total current assets 2,022 3,673
Property and equipment, net 7,655 13,456
Goodwill and other intangible assets 2,279 5,516
Restricted cash 69 109
Other long-term assets 478 577
---
Total assets $12,503 $23,331
======= =======
Liabilities and Stockholders' Equity/(Deficit)
Current liabilities
Current portion of long-term debt $222 $15,779
Other current liabilities 1,028 2,501
----- -----
Total current liabilities 1,250 18,280
Long-term debt 6,802 7,230
Other long-term liabilities 1,443 2,563
----- -----
Total liabilities 9,495 28,073
----- ------
Total Caesars stockholders' equity/(deficit) 1,832 (4,997)
Noncontrolling interests 1,176 255
Total stockholders' equity/(deficit) 3,008 (4,742)
Total liabilities and stockholders' equity $12,503 $23,331
======= =======
CAESARS ENTERTAINMENT CORPORATION
SUPPLEMENTAL INFORMATION
RECONCILIATION OF PROPERTY EBITDA AND ADJUSTED EBITDA
Property earnings before interest, taxes, depreciation and amortization ("EBITDA") is presented as a supplemental measure of the Company's performance. Property EBITDA is defined as revenues less property operating expenses and is comprised of net income/(loss) before (i) interest expense, net of interest capitalized and interest income; (ii) (benefit)/provision for income tax; (iii) depreciation and amortization; (iv) corporate expenses; and (v) certain items that management does not consider indicative of the Company's ongoing operating performance at an operating property level. In evaluating Property EBITDA, you should be aware that, in the future, the Company may incur expenses that are the same or similar to some of the adjustments in this presentation. The presentation of Property EBITDA should not be construed as an inference that future results will be unaffected by unusual or unexpected items.
Property EBITDA is a non-GAAP financial measure commonly used in our industry and should not be construed as an alternative to net income/(loss) as an indicator of operating performance or as an alternative to cash flow provided by operating activities as a measure of liquidity (as determined in accordance with GAAP). Property EBITDA may not be comparable to similarly titled measures reported by other companies within the industry. Property EBITDA is included because management uses Property EBITDA to measure performance and allocate resources and believes that Property EBITDA provides investors with additional information consistent with that used by management.
Adjusted EBITDA is defined as Property EBITDA further adjusted to exclude certain non-cash and other items required or permitted in calculating covenant compliance under the agreements governing CEOC, CERP, and CGP's secured credit facilities.
Adjusted EBITDA is presented as a supplemental measure of the Company's performance and management believes that Adjusted EBITDA provides investors with additional information and allows a better understanding of the results of operational activities separate from the financial impact of decisions made for the long-term benefit of the Company.
Because not all companies use identical calculations, the presentation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies.
The following tables reconcile net income/(loss) attributable to the companies presented to Property EBITDA and Adjusted EBITDA for the periods indicated. Amounts are presented on a legal entity basis consistent with agreements governing applicable secured credit facilities.
Property EBITDA (Legal Entity)
Three Months Ended June 30, Percent Six Months Ended June 30, Percent
Favorable/ Favorable/
(Unfavorable) (Unfavorable)
------------ ------------
(Dollars in
millions) 2015 2014 2015 2014
----------- ---- ---- ---- ----
CEOC $ - $239 * $31 $480 *
CERP 186 146 27.4% 356 274 29.9%
CGP Casinos 89 60 48.3% 171 131 30.5%
CIE 62 36 72.2% 111 47 136.2%
Other 14 (8) * 22 (47) *
--- --- --- --- --- ---
Total $351 $473 * $691 $885 *
==== ==== === ==== ==== ===
* Not meaningful
Adjusted EBITDA (Legal Entity)
Three Months Ended June 30, Percent Six Months Ended June 30, Percent
Favorable/ Favorable/
(Unfavorable) (Unfavorable)
------------ ------------
(Dollars in
millions) 2015 2014 2015 2014
----------- ---- ---- ---- ----
CEOC $ - $237 * $34 $485 *
CERP 182 128 42.2% 345 242 42.6%
CGP Casinos 91 61 49.2% 175 131 33.6%
CIE 70 45 55.6% 133 75 77.3%
Other 4 (16) * (5) (54) 90.7%
--- --- --- --- --- ----
Total $347 $455 * $682 $879 *
==== ==== === ==== ==== ===
* Not meaningful
CAESARS ENTERTAINMENT CORPORATION
SUPPLEMENTAL INFORMATION
RECONCILIATION OF NET INCOME/(LOSS) ATTRIBUTABLE TO CAESARS ENTERTAINMENT CORPORATION
TO PROPERTY EBITDA AND ADJUSTED EBITDA
Property earnings before interest, taxes, depreciation and amortization ("EBITDA") is presented as a supplemental measure of the Company's performance. Property EBITDA is defined as revenues less property operating expenses and is comprised of net income/(loss) before (i) interest expense, net of interest capitalized and interest income, (ii) (benefit)/provision for income taxes, (iii) depreciation and amortization, (iv) corporate expenses, and (v) certain items that the Company does not consider indicative of its ongoing operating performance at an operating property level. In evaluating Property EBITDA you should be aware that, in the future, the Company may incur expenses that are the same or similar to some of the adjustments in this presentation. The presentation of Property EBITDA should not be construed as an inference that future results will be unaffected by unusual or unexpected items.
Property EBITDA is a non-GAAP financial measure commonly used in our industry and should not be construed as an alternative to net income/(loss) as an indicator of operating performance or as an alternative to cash flow provided by operating activities as a measure of liquidity (as determined in accordance with GAAP). Property EBITDA may not be comparable to similarly titled measures reported by other companies within the industry. Property EBITDA is included because management uses Property EBITDA to measure performance and allocate resources, and believes that Property EBITDA provides investors with additional information consistent with that used by management.
Adjusted EBITDA is defined as EBITDA further adjusted to exclude certain non-cash and other items required or permitted in calculating covenant compliance under the indenture governing CEOC's secured credit facilities.
Adjusted EBITDA is presented as a supplemental measure of the Company's performance and management believes that Adjusted EBITDA provides investors with additional information and allows a better understanding of the results of operational activities separate from the financial impact of decisions made for the long-term benefit of the Company.
Because not all companies use identical calculations, the presentation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies.
The following tables reconcile net income/(loss) attributable to the companies presented to Property EBITDA and Adjusted EBITDA for the periods indicated.
CAESARS ENTERTAINMENT CORPORATION
SUPPLEMENTAL INFORMATION
RECONCILIATION OF NET INCOME/(LOSS) ATTRIBUTABLE TO CAESARS ENTERTAINMENT CORPORATION
TO PROPERTY EBITDA AND ADJUSTED EBITDA
Three Months Ended June 30, 2015 Three Months Ended June 30, 2014
-------------------------------- --------------------------------
(In millions) CEOC (i) CERP (j) CGP CIE Other (l) CEC CEOC (i) CERP (j) CGP CIE Other (l) CEC
Casinos (k) Casinos (k)
--- ---
Net income/(loss)
attributable to company $ - $17 $2 $33 $(37) $15 $(339) $(31) $13 $(2) $(107) $(466)
Net income/(loss)
attributable to
noncontrolling interests - - (4) 6 33 35 1 - (2) 1 34 34
--- --- --- --- --- --- --- --- --- --- --- ---
Net income/(loss) - 17 (2) 39 (4) 50 (338) (31) 11 (1) (73) (432)
Net (income)/loss from
discontinued operations - - - - - - 22 - - 16 7 45
--- --- --- --- --- --- --- --- --- --- --- ---
Net (income)/loss from
continuing operations - 17 (2) 39 (4) 50 (316) (31) 11 15 (66) (387)
Income tax
(benefit)/provision - 11 - 14 (29) (4) (163) 1 4 (19) 10 (167)
--- --- --- --- --- --- ---- --- --- --- --- ----
Income/(loss) from
continuing operations
before income taxes - 28 (2) 53 (33) 46 (479) (30) 15 (4) (56) (554)
Gain on deconsolidation of
subsidiary - - - - (7) (7) - - - - - -
Other (gains)/losses (a) - - (1) - 1 - (2) - (28) - 57 27
Interest expense - 98 47 1 1 147 548 99 61 1 (55) 654
--- --- --- --- --- --- --- --- --- --- --- ---
Income/(loss) from
operations - 126 44 54 (38) 186 67 69 48 (3) (54) 127
Depreciation and
amortization - 49 38 8 1 96 81 56 26 7 (13) 157
Impairment of intangible and
tangible assets (b) - - - - - - 18 - - - (1) 17
Write-downs, reserves, and
project opening costs, net
of recoveries(c) - 1 4 - 19 24 47 2 8 - (5) 52
Acquisition and integration
costs and other (d) - - 3 - (3) - 6 - (22) 32 38 54
Corporate expense - 10 - - 35 45 44 19 - - 5 68
Impact of consolidating The
LINQ and Octavius Tower (e) - - - - - - (22) - - - 22 -
EBITDA attributable to
discontinued operations - - - - - - (2) - - - - (2)
Property EBITDA - 186 89 62 14 351 239 146 60 36 (8) 473
Corporate expense - (10) - - (35) (45) (44) (19) - - (5) (68)
Stock-based compensation
expense (f) - 3 1 7 20 31 14 1 - 8 1 24
Adjustments to include 100%
of Baluma S.A.'s adjusted
EBITDA (g) - - - - - - 2 - - - - 2
Depreciation in corporate
expense - - - - - - 14 - - - - 14
Other items(h) - 3 1 1 5 10 12 - 1 1 (4) 10
--- --- --- --- ---
Adjusted EBITDA, Legal
Entity - 182 91 70 4 347 237 128 61 45 (16) 455
Impact of property
transactions - - - - - - (24) - - - 24 -
Adjusted EBITDA, Reportable
Segments $ - $182 $91 $70 $4 $347 $213 $128 $61 $45 $8 $455
=== === ==== === === === ==== ==== ==== === === === ====
CAESARS ENTERTAINMENT CORPORATION
SUPPLEMENTAL INFORMATION
RECONCILIATION OF NET INCOME/(LOSS) ATTRIBUTABLE TO CAESARS ENTERTAINMENT CORPORATION
TO PROPERTY EBITDA AND ADJUSTED EBITDA
Six Months Ended June 30, 2015 Six Months Ended June 30, 2014
------------------------------ ------------------------------
(In millions) CEOC(i) CERP(j) CGP CIE Other(l) CEC CEOC(i) CERP(j) CGP CIE Other(l) CEC
Casinos (k) Casinos (k)
--- ---------- ----------
Net income/(loss) attributable to
company $(85) $20 $123 $54 $6,675 $6,787 $(779) $(39) $8 $(1) $(42) $(853)
Net income/(loss) attributable to
noncontrolling interests - - (9) 11 58 60 3 - (10) 1 43 37
--- --- --- --- --- --- --- --- --- --- --- ---
Net income/(loss) (85) 20 114 65 6,733 6,847 (776) (39) (2) - 1 (816)
Net (income)/loss from discontinued
operations 7 - - - - 7 101 - - 17 11 129
--- --- --- --- --- --- --- --- --- --- --- ---
Net (income)/loss from continuing
operations (78) 20 114 65 6,733 6,854 (675) (39) (2) 17 12 (687)
Income tax (benefit)/provision - 13 - 27 148 188 (255) (23) 12 (18) (25) (309)
--- --- --- --- --- --- ---- --- --- --- --- ----
Income/(loss) from continuing
operations before income taxes (78) 33 114 92 6,881 7,042 (930) (62) 10 (1) (13) (996)
Gain on deconsolidation of subsidiary - - - - (7,096) (7,096) - - - - - -
Other (gains)/losses (a) - - - - - - (3) - (78) - 108 27
Interest expense 87 200 94 3 - 384 1,084 190 76 2 (106) 1,246
--- --- --- --- --- --- ----- --- --- --- ---- -----
Income/(loss) from operations 9 233 208 95 (215) 330 151 128 8 1 (11) 277
Depreciation and amortization 11 99 71 16 1 198 183 106 47 14 (45) 305
Impairment of intangible and tangible
assets(b) - - - - - - 30 - - - 20 50
Write-downs, reserves, and project
opening costs, net of recoveries(c) 1 2 7 - 56 66 59 6 22 - (11) 76
Acquisition and integration costs and
other(d) 3 - (115) - 118 6 16 - 54 33 (38) 65
Corporate expense 7 22 - - 62 91 79 34 - - 6 119
Impact of consolidating The LINQ and
Octavius Tower(e) - - - - - - (32) - - - 32 -
EBITDA attributable to discontinued
operations - - - - - - (6) - - (1) - (7)
Property EBITDA 31 356 171 111 22 691 480 274 131 47 (47) 885
Corporate expense (7) (22) - - (62) (91) (79) (34) - - (6) (119)
Stock-based compensation expense (f) 1 6 2 20 28 57 22 1 - 26 1 50
Adjustments to include 100% of Baluma
S.A.'s adjusted EBITDA(g) 3 - - - - 3 23 - - - - 23
Depreciation in corporate expense 2 - - - - 2 22 - - - - 22
Other items(h) 4 5 2 2 7 20 17 1 - 2 (2) 18
--- --- --- --- --- --- --- --- --- --- --- ---
Adjusted EBITDA 34 345 175 133 (5) 682 485 242 131 75 (54) 879
Impact of property transactions - - - - - - (69) - - - 69 -
Adjusted EBITDA, Reportable Segments $34 $345 $175 $133 $(5) $682 $416 $242 $131 $75 $15 $879
=== ==== ==== ==== === ==== ==== ==== ==== === === ====
CAESARS ENTERTAINMENT CORPORATION
NOTES TO SUPPLEMENTAL INFORMATION
RECONCILIATION OF NET INCOME/(LOSS)
ATTRIBUTABLE TO CAESARS ENTERTAINMENT
CORPORATION
TO PROPERTY EBITDA AND ADJUSTED EBITDA
(a) 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.
(b) Amounts
represent non-
cash charges to
impair
intangible and
tangible assets
primarily
resulting from
changes in the
business
outlook in
light of
competitive
conditions.
(c) Amounts
primarily
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.
(d) Amounts include
certain costs
associated with
acquisition and
development
activities and
reorganization
activities,
which are
infrequently
occurring
costs.
(e) Amounts
represent the
EBITDA of The
LINQ and
Octavius Tower
as consolidated
in CEOC.
Because The
LINQ and
Octavius Tower
are not legally
owned by CEOC
the related
EBITDA impact
is removed from
Property EBITDA
and Adjusted
EBITDA
measures.
(f) Amounts
represent
stock-based
compensation
expense related
to shares,
stock options,
and restricted
stock granted
to the
Company's
employees.
(g) Amounts
represent
adjustments to
include 100% of
Baluma S.A.
(Conrad 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.
(h) 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, but
not separately
identified.
Such add-backs
and deductions
include
litigation
awards and
settlements,
costs
associated with
CEOC's
restructuring
and related
litigation,
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).
(i) Amounts include
the results and
adjustments of
CEOC on a
consolidated
basis without
the exclusion
of CEOC's
unrestricted
subsidiaries,
and therefore,
are different
than the
calculations
used to
determine
compliance with
debt covenants
under the
credit
facility.
(j) Amounts include
the results
and
adjustments of
CERP on a
stand-alone
basis.
(k) Amounts include
the results
and
adjustments
attributable
to CGP on a
stand-alone
basis.
(l) Amounts include
consolidating
adjustments,
eliminating
adjustments
and other
adjustments to
reconcile to
consolidated
CEC Property
EBITDA and
Adjusted
EBITDA.
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SOURCE Caesars Entertainment Corporation
