CAESARS ENTERTAINMENT, INC. LAS VEGAS, March 2, 2015 /PRNewswire/ -- Caesars Entertainment Corporation (NASDAQ: CZR) today reported the following fourth quarter and full year 2014 results and recent developments:
-- Consolidated net revenues increased 6% year-over-year driven by growth
at CGP LLC and CERP
-- Consolidated results led by strength in social and mobile games and new
hospitality offerings were offset by unfavorable hold at Caesars Palace
and increased operating expenses
-- CEOC announced comprehensive debt restructuring plan on December 19,
which includes a significant reduction in CEOC's long-term debt and
annual interest payments
-- Caesars Acquisition Company and Caesars Entertainment announced on
December 22 an agreement to merge in a combined company that will be
positioned for sustainable long-term growth and value creation
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Summary Financial Data
The table below highlights certain GAAP and non-GAAP financial measures on a consolidated basis:
Three Months Ended December 31, Percent Years Ended December 31, Percent
Favorable/ Favorable/
(Unfavorable) (Unfavorable)
------------
(Dollars in
millions, except
per share data) 2014 2013 2014 2013
----------------- ---- ---- ---- ----
Casino revenues
(1) $1,371 $1,350 1.6% $5,418 $5,529 (2.0)%
Net revenues (1) 2,131 2,004 6.3% 8,516 8,220 3.6%
Loss from
operations (1) (402) (1,777) 77.4% (452) (2,026) 77.7%
Loss from
continuing
operations, net
of income taxes
(1) (1,055) (1,655) 36.3% (2,674) (2,733) 2.2%
Loss from
discontinued
operations, net
of income taxes (15) (97) 84.5% (192) (207) 7.2%
Net loss
attributable to
Caesars (1,011) (1,757) 42.5% (2,771) (2,948) 6.0%
Basic and diluted
loss per share (7.00) (12.83) 45.4% (19.45) (22.93) 15.2%
Property EBITDA
(2) 359 386 (7.0)% 1,689 1,877 (10.0)%
Adjusted EBITDA
(3) 372 406 (8.4)% 1,693 1,855 (8.7)%
(1) -(3) See footnotes following Cash and Available Revolver Capacity
later in this release
Management Commentary
"Ongoing strength in the interactive business, new hospitality offerings and sequential improvement in same-store regional results were key drivers of our fourth quarter performance despite the continuation of exceptionally unfavorable hold at Caesars Palace," said Gary Loveman, chairman, chief executive officer and president of Caesars Entertainment. "As we begin 2015, we are highly focused on enhancing performance at CEOC through a series of cost initiatives and the implementation of the previously announced financial restructuring plan. With more than 80% of first lien noteholders supporting the plan, we are committed to working with additional creditor groups to build greater consensus and complete the restructuring process as quickly as possible."
Other Key Matters During the Quarter
In the discussion below, the words "Company," "Caesars," "Caesars Entertainment," "CEC," "we," and "our" refer to Caesars Entertainment Corporation and its consolidated entities, unless otherwise stated or the context requires otherwise.
Fourth quarter Adjusted EBITDA for Caesars Entertainment Corporation was $372 million. Top-line results benefited from the addition of The Cromwell, Horseshoe Baltimore, and the High Roller as well as new hospitality offerings. Furthermore, strong growth in CIE provided over $60 million in incremental revenue in the quarter. These increases to revenue were negatively impacted by approximately $60 million of unfavorable year-over-year hold at Caesars Palace, higher start-up costs from new properties as well as new food and beverage outlets, and increased overhead expenses.
The Company is intensely focused on ensuring operating costs are aligned with the current environment to enhance CEC's profitability. To that end, the Company is acting aggressively to reduce expenses and increase EBITDA across the Company through a variety of identified initiatives in operations, marketing and corporate expenses. CEC will no longer consolidate CEOC beginning with the CEOC bankruptcy filing on January 15, 2015. Including CEOC and the entities (CES, CERP, CGP LLC and their consolidated subsidiaries) that will remain in CEC's consolidated results subsequent to CEOC's bankruptcy filing, we expect to produce an incremental $250 to $300 million of EBITDA in 2015 as a result of these actions, with the overwhelming majority of this increase to be driven by cost savings. During the fourth quarter, the Company realized approximately $9 million in cost savings but the real benefits from these efforts will be seen beginning in the first quarter of 2015.
On December 19, 2014, CEOC reached an agreement with certain of CEOC's first lien noteholders regarding terms of a financial restructuring plan, which would significantly reduce long-term debt and annual interest payments, and result in a stronger balance sheet for CEOC. The restructuring support agreement has now been signed by over 80% of the first lien noteholders.
Additionally, on December 22, 2014, Caesars Entertainment and Caesars Acquisition Company announced a definitive agreement to merge in an all-stock transaction. The planned merger will position the combined company to support the restructuring of CEOC without the need for any significant outside financing.
To implement the financial restructuring, CEOC and certain of its U.S. subsidiaries voluntarily filed for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Northern District of Illinois in Chicago on January 15, 2015. All Caesars Entertainment properties, including those owned by CEOC, are open for business and are continuing to operate in the ordinary course. The restructuring is conditioned upon the release of all pending and potential litigation claims against Caesars Entertainment, Caesars Acquisition Company and related parties. The proposed restructuring plan remains subject to approval by the Bankruptcy Court and the receipt of required gaming regulatory approvals.
Financial Results
The financial results presented below leverage a management view and include Caesars with its four reportable segments and Parent/Other. Segment results are presented consistent with the way CEC management assesses these results, which is a consolidated view that adjusts for the impact of certain transactions between reportable segments within Caesars, as described below. As a result, the results of certain reportable segments presented in this release differ from the financial statement information presented in their separate filings.
Segment Net Revenues((9))
Three Months Ended December 31, Percent Years Ended December 31, Percent
Favorable/ Favorable/
(Unfavorable) (Unfavorable)
------------ ------------
(Dollars
in
millions) 2014 2013 2014 2013
---------- ---- ---- ---- ----
CEOC (4) $1,149 $1,221 (5.9)% $4,812 $4,985 (3.5)%
CERP (5) 500 463 8.0% 2,065 1,979 4.3%
CGP LLC
Casinos
(6) 371 265 40.0% 1,281 1,040 23.2%
CIE (7) 156 95 64.2% 587 317 85.2%
Parent /
Other(8) (45) (40) (12.5)% (229) (101) (126.7)%
--- --- ---- ----
Total $2,131 $2,004 6.3% $8,516 $8,220 3.6%
====== ====== ====== ======
Segment Income/(loss) from Operations((9))
Three Months Ended December 31, Percent Years Ended December 31, Percent
Favorable/ Favorable/
(Unfavorable) (Unfavorable)
------------ ------------
(Dollars
in
millions) 2014 2013 2014 2013
---------- ---- ---- ---- ----
CEOC (4) $(102) $(863) 88.2% $(323) $(1,344) 76.0%
CERP (5) (122) (981) 87.6% (32) (804) 96.0%
CGP LLC
Casinos
(6) (208) (115) (80.9)% (139) (3) *
CIE (7) - (4) 100.0 21 (9) *
Parent /
Other(8) 30 186 (83.9)% 21 134 (84.3)%
Total $(402) $(1,777) 77.4% $(452) $(2,026) 77.7%
===== ======= ===== =======
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 LLC 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 LLC and therefore, controls all decisions regarding the liquidity and capital resources of CGP LLC.
December 31, 2014
-----------------
(In millions) CEOC(10) CERP CES CGP LLC Parent
------- ---- --- ------- ------
Cash and cash
equivalents $1,194 $189 $70 $944 $409
Revolver
capacity 270 - 150 -
Revolver
capacity drawn
or committed
to letters of
credit (180) - - -
Total cash and
revolver
capacity $279 $70 $1,094 $409
==== === ====== ====
* Not meaningful
(1) Casino revenues, net revenues, income from
operations, and loss from continuing
operations, net of income taxes for all
periods presented in the table above exclude
the results of Alea Leeds casino (closed in
March 2013), Golden Nugget casino (closed in
February 2014), Harrah's Tunica casino
(closed in June 2014), CIE RMG BEL (closed in
August 2014), Showboat casino (closed in
August 2014) and the subsidiaries that held
the Company's land concession in Macau (sold
in November 2013) because all of 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) CEOC results present the sales of The LINQ
promenade and Octavius Tower (to CERP in
2013); Planet Hollywood Resort & Casino (to
CGP LLC in October 2013); Horseshoe Baltimore
(to CGP LLC in October 2013) and The
Cromwell, Bally's Las Vegas, The LINQ Hotel,
and Harrah's New Orleans (to CGP LLC in May
2014) as if they had occurred as of the
earliest period presented, consistent with
internal management presentation.
(5) CERP includes The LINQ promenade and Octavius
Tower in all periods presented.
(6) CGP LLC Casinos is comprised of all
subsidiaries of CGP LLC excluding CIE.
(7) CIE is comprised of the subsidiaries that
operate its social and mobile gaming
operations and WSOP.
(8) Parent/Other includes consolidating
adjustments, eliminating adjustments and
other adjustments to reconcile to
consolidated CEC results and CEC Parent level
activity.
(9) As consolidated, and adjusted
(10) CEOC is unable to draw on its remaining
revolver capacity subsequent to its voluntary
filing for reorganization under Chapter 11.
Conference Call Information
Caesars Entertainment Corporation (NASDAQ: CZR) will host a conference call at 1:30 p.m. Pacific Time Monday, March 2, 2015 to review its fourth quarter results. The call will be accessible in 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 877-637-3676, or 832-412-1752 for international callers, and enter Conference ID 84866985 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.
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: the majority owned operating subsidiary Caesars Entertainment Operating Company, wholly owned Caesars Entertainment Resort Properties and Caesars Growth Partners, in which we hold a variable economic interest. Since its beginning in Reno, Nevada, 77 years ago, CEC has grown through development of new resorts, expansions, and acquisitions, and its portfolio of subsidiaries now operate 49 casinos in 14 U.S. states and five countries. The Company's resorts operate primarily under the Caesars®, Harrah's®, and Horseshoe® brand names. CEC's portfolio also includes the London Clubs International family of casinos. CEC 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 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 "will," "expect," "believe," "plan," "would," or "positioned", 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 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 Forbearance Agreement ("RSA")
may not be consummated in accordance with its terms, or persons not
party to the RSA 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 RSA;
-- 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 RSA;
-- 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 LLC'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;
-- severe weather conditions 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 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, 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, 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; 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 Years Ended December 31,
December 31,
------------
2014 2013 2014 2013
---- ---- ---- ----
Revenues
Casino $1,371 $1,350 $5,418 $5,529
Food and beverage 378 347 1,522 1,451
Rooms 292 279 1,207 1,167
Management fees 13 15 58 57
Other 306 228 1,197 855
Reimbursable management costs 55 65 252 268
Less: casino promotional
allowances (284) (280) (1,138) (1,107)
---- ---- ------ ------
Net revenues 2,131 2,004 8,516 8,220
----- ----- ----- -----
Operating expenses
Direct
Casino 840 783 3,253 3,112
Food and beverage 178 151 694 639
Rooms 74 71 315 296
Property, general,
administrative, and other 625 544 2,306 2,035
Reimbursable management costs 55 65 252 268
Depreciation and amortization 165 168 636 701
Write-downs, reserves, and
project opening costs, net of
recoveries 24 59 120 104
Impairment of goodwill 407 - 695 104
Impairment of intangible and
tangible assets 39 1,885 299 2,727
Corporate expense 90 47 282 161
Acquisition and integration
costs and other 36 8 116 99
Total operating expenses 2,533 3,781 8,968 10,246
----- ----- ----- ------
Loss from operations (402) (1,777) (452) (2,026)
Interest expense (716) (574) (2,670) (2,252)
Other gains/(losses) (1) (43) (95) 28
--- --- --- ---
Loss from continuing operations
before income taxes (1,119) (2,394) (3,217) (4,250)
Income tax benefit 64 739 543 1,517
--- --- --- -----
Loss from continuing operations,
net of income taxes (1,055) (1,655) (2,674) (2,733)
Discontinued operations
Loss from discontinued
operations (25) (88) (213) (239)
Income tax benefit/(provision) 10 (9) 21 32
--- ---
Loss from discontinued
operations, net of income taxes (15) (97) (192) (207)
--- --- ---- ----
Net loss (1,070) (1,752) (2,866) (2,940)
Net (income)/loss attributable
to noncontrolling interests 59 (5) 95 (8)
Net loss attributable to Caesars $(1,011) $(1,757) $(2,771) $(2,948)
======= ======= ======= =======
Loss per share - basic and diluted
Loss per share from continuing
operations $(6.90) $(12.13) $(18.10) $(21.32)
Loss per share from discontinued
operations (0.10) (0.70) (1.35) (1.61)
----- ----- ----- -----
Net loss per share $(7.00) $(12.83) $(19.45) $(22.93)
====== ======= ======= =======
CAESARS ENTERTAINMENT CORPORATION
CONSOLIDATED CONDENSED SUMMARY BALANCE SHEETS
(UNAUDITED)
(In millions)
December 31, 2014 December 31, 2013
----------------- -----------------
Assets
Current assets
Cash and cash equivalents $2,806 $2,771
Restricted cash 76 88
Other current assets 791 911
--- ---
Total current assets 3,673 3,770
Property and equipment, net 13,456 13,238
Goodwill and other intangible assets 5,516 6,551
Restricted cash 109 337
Other long-term assets 781 793
---
Total assets $23,535 $24,689
======= =======
Liabilities and Stockholders' Deficit
Current liabilities
Current portion of long-term debt $15,779 $197
Other current liabilities 2,501 2,334
----- -----
Total current liabilities 18,280 2,531
Long-term debt 7,434 20,918
Other long-term liabilities 2,563 3,144
----- -----
Total liabilities 28,277 26,593
------ ------
Total Caesars stockholders' deficit (4,998) (3,122)
Noncontrolling interests 256 1,218
Total deficit (4,742) (1,904)
Total liabilities and stockholders' deficit $23,535 $24,689
======= =======
CAESARS ENTERTAINMENT CORPORATION
SUPPLEMENTAL INFORMATION
RECONCILIATION OF NET 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 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 LLC'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.
Property EBITDA((a))
Three Months Ended December 31, Percent Years Ended December 31, Percent
Favorable/ Favorable/
(Unfavorable) (Unfavorable)
------------ ------------
(Dollars
in
millions) 2014 2013 2014 2013
---------- ---- ---- ---- ----
CEOC $174 $263 (33.8)% $886 $1,290 (31.3)%
CERP 116 104 11.5% 519 530 (2.1)%
CGP LLC 64 65 (1.5)% 324 304 6.6%
Other 5 (46) * (40) (247) 83.8%
--- --- --- ----
Total $359 $386 (7.0)% $1,689 $1,877 (10.0)%
==== ==== ====== ======
Adjusted EBITDA((a))
Three Months Ended December 31, Percent Years Ended December 31, Percent
Favorable/ Favorable/
(Unfavorable) (Unfavorable)
------------ ------------
(Dollars
in
millions) 2014 2013 2014 2013
---------- ---- ---- ---- ----
CEOC $171 $274 (37.6)% $888 $1,272 (30.2)%
CERP 103 95 8.4% 467 493 (5.3)%
CGP LLC 103 85 21.2% 416 339 22.7%
Other (5) (48) 89.6% (78) (249) 68.7%
--- --- --- ----
Total $372 $406 (8.4)% $1,693 $1,855 (8.7)%
==== ==== ====== ======
* Not meaningful
(a) Property EBITDA and Adjusted
EBITDA are presented on a legal
entity basis consistent with
agreements governing applicable
secured credit facilities.
CAESARS ENTERTAINMENT CORPORATION
SUPPLEMENTAL INFORMATION
RECONCILIATION OF NET LOSS ATTRIBUTABLE TO CAESARS ENTERTAINMENT CORPORATION
TO PROPERTY EBITDA AND ADJUSTED EBITDA
Three Months Ended December 31, 2014 Three Months Ended December 31, 2013
------------------------------------ ------------------------------------
(In millions) CEOC(i) CERP(j) CGP LLC(k) Other(l) CEC CEOC(i) CERP(j) CGP LLC/
Predecessor(k) Other(l) CEC
------------- ------ ------ --------- ------- --- ------ ------ --------------- ------- ---
Net income/(loss) attributable to
company $(739) $(217) $(247) $192 $(1,011) $(1,385) $(696) $(114) $438 $(1,757)
Net income/(loss) attributable to
noncontrolling interests 5 - (18) (46) (59) 2 - (5) 8 5
--- --- --- --- --- --- --- --- --- ---
Net income/(loss) (734) (217) (265) 146 (1,070) (1,383) (696) (119) 446 (1,752)
Net (income)/loss from discontinued
operations 24 - - (9) 15 93 - - 4 97
--- --- --- --- --- --- --- --- --- ---
Net income/(loss) from continuing
operations (710) (217) (265) 137 (1,055) (1,290) (696) (119) 450 (1,655)
Income tax (benefit)/provision 41 (6) 17 (116) (64) (68) (409) 19 (281) (739)
--- --- --- ---- --- --- ---- --- ---- ----
Income/(loss) from continuing
operations before income taxes (669) (223) (248) 21 (1,119) (1,358) (1,105) (100) 169 (2,394)
Other (gains)/losses(a) 2 - - (1) 1 (6) 37 (45) 57 43
Interest expense 561 101 49 5 716 532 88 21 (67) 574
--- --- --- --- --- --- --- --- --- ---
Income/(loss) from operations (106) (122) (199) 25 (402) (832) (980) (124) 159 (1,777)
Depreciation and amortization 81 46 44 (6) 165 116 53 28 (29) 168
Impairment of intangible and
tangible assets(b) 118 172 147 9 446 910 1,016 - (41) 1,885
Write-downs, reserves, and project
opening costs, net of recoveries(c) (2) 3 19 4 24 53 5 4 (3) 59
Acquisition and integration costs
and other(d) 31 - 6 (1) 36 (9) - 15 2 8
Corporate expense 55 17 - 18 90 35 10 - 2 47
Impact of consolidating The LINQ and
Octavius Tower(e) (3) - - 3 - (6) - - 6 -
Change in fair value of contingently
issuable non-voting membership
units - - 47 (47) - - - 138 (138) -
Change in fair value of contingent
consideration - - - - - - - 4 (4) -
EBITDA attributable to discontinued
operations - - - - - (4) - - - (4)
Property EBITDA $174 $116 $64 $5 $359 $263 $104 $65 $(46) $386
==== ==== === === ==== ==== ==== === ==== ====
Corporate expense (55) (17) - (18) (90) (35) (10) - (2) (47)
Stock-based compensation expense (f) 8 2 39 - 49 20 - 19 (3) 36
Adjustments to include 100% of
Baluma S.A.'s adjusted EBITDA(g) 8 - - - 8 10 - - - 10
Depreciation in corporate expense 11 - - - 11 3 - - - 3
Other items(h) 25 2 - 8 35 13 1 1 3 18
--- --- --- ---
Adjusted EBITDA $171 $103 $103 $(5) $372 $274 $95 $85 $(48) $406
==== ==== ==== === ==== ==== === === ==== ====
CAESARS ENTERTAINMENT CORPORATION
SUPPLEMENTAL INFORMATION
RECONCILIATION OF NET LOSS ATTRIBUTABLE TO CAESARS ENTERTAINMENT CORPORATION
TO PROPERTY EBITDA AND ADJUSTED EBITDA
Year Ended December 31, 2014 Year Ended December 31, 2013
---------------------------- ----------------------------
(In millions) CEOC(i) CERP(j) CGP LLC(k) Other(l) CEC CEOC(i) CERP(j) CGP LLC/
Predecessor(k) Other(l) CEC
------------- ------ ------ --------- ------- --- ------ ------ --------------- ------- ---
Net income/(loss) attributable to
company $(2,393) $(406) $(181) $209 $(2,771) $(3,066) $(638) $8 $748 $(2,948)
Net income/(loss) attributable to
noncontrolling interests 8 - (33) (70) (95) 4 - (10) 14 8
--- --- --- --- --- --- --- --- --- ---
Net income/(loss) (2,385) (406) (214) 139 (2,866) (3,062) (638) (2) 762 (2,940)
Net (income)/loss from discontinued
operations 173 - 16 3 192 218 - - (11) 207
--- --- --- --- --- --- --- --- --- ---
Net income/(loss) from continuing
operations (2,212) (406) (198) 142 (2,674) (2,844) (638) (2) 751 (2,733)
Income tax (benefit)/provision (383) (27) 49 (182) (543) (517) (384) 75 (691) (1,517)
---- --- --- ---- ---- ---- ---- --- ---- ------
Income/(loss) from continuing
operations before income taxes (2,595) (433) (149) (40) (3,217) (3,361) (1,022) 73 60 (4,250)
Other (gains)/losses(a) 100 - (96) 91 95 (27) (15) (175) 189 (28)
Interest expense 2,228 389 173 (120) 2,670 2,145 246 77 (216) 2,252
----- --- --- ---- ----- ----- --- --- ---- -----
Income/(loss) from operations (267) (44) (72) (69) (452) (1,243) (791) (25) 33 (2,026)
Depreciation and amortization 352 200 143 (59) 636 500 216 102 (117) 701
Impairment of intangible and
tangible assets(b) 536 289 211 (42) 994 1,809 1,046 - (24) 2,831
Write-downs, reserves, and project
opening costs, net of recoveries(c) 60 13 53 (6) 120 91 15 20 (22) 104
Acquisition and integration costs
and other(d) 58 1 17 40 116 34 (3) 15 53 99
Corporate expense 189 60 - 33 282 98 47 - 16 161
Impact of consolidating The LINQ and
Octavius Tower(e) (36) - - 36 - (6) - - 6 -
Change in fair value of contingently
issuable non-voting membership
units - - 39 (39) - - - 139 (139) -
Change in fair value of contingent
consideration - - 33 (33) - - - 53 (53) -
Gain on sale of bonds - - (99) 99 - - - - - -
EBITDA attributable to discontinued
operations (6) - (1) - (7) 7 - - - 7
Property EBITDA $886 $519 $324 $(40) $1,689 $1,290 $530 $304 $(247) $1,877
==== ==== ==== ==== ====== ====== ==== ==== ===== ======
Corporate expense (189) (60) - (33) (282) (98) (47) - (16) (161)
Stock-based compensation expense (f) 41 3 88 - 132 35 1 32 (14) 54
Adjustments to include 100% of
Baluma S.A.'s adjusted EBITDA(g) 29 - - - 29 9 - - - 9
Depreciation in corporate expense 50 - - - 50 13 - - - 13
Other items(h) 71 5 4 (5) 75 23 9 3 28 63
Adjusted EBITDA $888 $467 $416 $(78) $1,693 $1,272 $493 $339 $(249) $1,855
==== ==== ==== ==== ====== ====== ==== ==== ===== ======
CAESARS ENTERTAINMENT CORPORATION
NOTES TO SUPPLEMENTAL INFORMATION
RECONCILIATION OF NET LOSS ATTRIBUTABLE TO CAESARS ENTERTAINMENT CORPORATION
TO PROPERTY EBITDA AND ADJUSTED EBITDA
(a) Amounts primarily represent (gain)/loss
on early extinguishments of debt, which
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
promenade and Octavius Tower as
consolidated in CEOC. Because The LINQ
promenade 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,
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 LLC and
Predecessor Growth Partners
("Predecessor") on a consolidated or
combined, stand-alone basis. The
consolidated financial information for
the periods subsequent to October 21,
2013 reflects the impacts of the
transaction forming CGP LLC in October
2013, including the recording of non-
controlling interest and the
determination of taxes in accordance
with the limited liability company
structure of CGP LLC. Financial
information for the period through
October 21, 2013, referred to herein as
Predecessor Growth Partners
("Predecessor"), presents the
combination of the assets and entities
that were purchased by or contributed to
CGP LLC with financial information
derived from the historical accounting
records and consolidated financial
statements of Caesars Entertainment. The
financial statement information of CGP
LLC presented above have been prepared
consistent with CGP LLC's presentation
of its results presented on a stand-
alone basis. As the properties were
acquired from CEOC, CGP LLC has treated
these acquisitions as a reorganization
of entities under common control;
accordingly all properties results are
reported as if acquired as of the
earliest period presented.
(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
