Caesars Entertainment Reports Strong Financial Results for the Third Quarter of 2017

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LAS VEGAS, Nov. 1, 2017 /PRNewswire/ -- Caesars Entertainment Corporation CZR ("CEC") today reported third quarter of 2017 results as summarized in the discussion below, which highlights certain GAAP and non-GAAP financial measures on a consolidated basis. As of October 6, 2017, Caesars Entertainment Operating Company (now known as CEOC, LLC "CEOC") emerged from Bankruptcy and CEC completed the merger of Caesars Acquisition Company ("CAC"). Accordingly, certain additional non-GAAP financial measures have been added to highlight the pro-forma results of the company including CEOC and CAC. Due to the timing of CEOC's emergence and the completion of the merger of CAC, CEC results do not include CEOC. "Enterprise-wide" results below include CEOC as if its results were consolidated during the third quarter. See the tables at the end of this press release for the reconciliation of non-GAAP to GAAP presentations.

Caesars Entertainment Corporation logo.

Third Quarter of 2017

CEC Operating Income Margins Expand

  • Net revenue for CEC was flat at $1.0 billion. On a same-store basis, which excludes the recently deconsolidated Horseshoe Baltimore from both years, net revenue was up 3.8% to $939 million, driven by strong gaming volume, hotel performance, and incremental revenues from operational initiatives.
  • Net loss for CEC, before adjusting for noncontrolling interest, was $460 million, driven by an adjustment of $472 million to the restructuring of CEOC.
  • Income from operations for CEC improved $130 million year-over-year to $86 million, representing an operating margin of 8.7%, due to accelerated stock based compensation of $145 million associated with the sale of the CIE social and mobile games business in the third quarter of 2016.
  • Adjusted EBITDA for CEC improved $34 million, 12.6% year-over-year to $303 million, driving margins up 345 basis points to 30.7%. On a same-store basis, adjusted EBITDA improved $44 million, 17.7%, lifting margins 369 basis points to 31.2%.
  • Repriced and refinanced debt through Q3 2017 that will reduce total annual interest expense by $270 million.

Enterprise Wide Adjusted EBITDA Margins Expand

  • Net revenue for the enterprise grew 0.9% to $2.13 billion. On a same-store basis, net revenue for the enterprise grew 2.6% to $2.09 billion. Net revenue was driven by domestic gaming volume growth, solid hospitality improvement, and enhanced operational initiatives.
  • Enterprise-wide adjusted EBITDA improved $77 million, 14.1% to $622 million, or on a same-store basis improved $87 million, 16.6% to $612 million. Enterprise-wide adjusted EBITDA margins expanded 340 basis points, to 29.2%, or on a same-store basis improved 350 basis points to 29.3%. While GAAP operating income margins showed solid improvement, the enterprise-wide adjusted EBITDA margins represent a third quarter record.
  • Refinanced Harrah's Philadelphia debt in Q4 of 2017, which, subject to regulatory approval, is expected to reduce annual interest expense by an additional $20 million. On an enterprise-wide basis, our debt refinancing efforts will save approximately $290 million of annual interest payments.

"Revenue growth accelerated in the third quarter, led by a 10.4% improvement in Caesars Palace gaming revenue," said Mark Frissora, President and Chief Executive Officer. "Despite $10-15 million of unfavorable year-over-year hold, our GAAP operating income and enterprise-wide adjusted EBITDA margins improved to 8.7% and 29.2%, respectively, supported by increased gaming volume across our domestic properties, solid hospitality performance, and improved labor productivity.

"We were also pleased to have completed the restructuring of CEOC and merger with CAC on October 6, simplifying our business and allowing us to turn our full attention to our growth initiatives," Mr. Frissora added. "Our future appears bright with a much improved balance sheet, approximately $2 billion in cash, and strong free cash flow. We are well positioned to continue to invest in our core business and pursue a more diversified growth strategy."

Summary Financial Data

The results of CEOC and its subsidiaries were not consolidated with Caesars subsequent to CEOC and certain of its United States subsidiaries (the "Debtors") voluntarily filing for reorganization under Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy Code") on January 15, 2015. In January 2017, the U.S. Bankruptcy Court for the Northern District of Illinois approved CEOC's Plan of Reorganization. On October 6, CEC announced the completion of its merger with Caesars Acquisition Company and the conclusion of the restructuring of CEOC and its debtor subsidiaries. Horseshoe Baltimore operations were deconsolidated from CEC results effective August 31, 2017. As a result, the current year does not include a fully comparable operating period to the prior year."Same Store" references in our discussion of results excludes Horseshoe Baltimore for analytical purposes.

Supplemental materials have been posted on the Caesars Entertainment Investor Relations website at http://investor.caesars.com/financials.cfm.


Three Months Ended September 30,


CEC Same-store


2017


2016


Change

(Dollars in millions, except per share data)

CEC


Baltimore (2)


CEC 
Same-store


CEC


Baltimore (2)


CEC 
Same-store


$


%

Casino revenues

$

531



$

45



$

486



$

542



$

77



$

465



$

21



4.5%


Net revenues

986



47



939



986



81



905



34



3.8%


Income/(loss) from operations

86



5



81



(44)



12



(56)



137



*


Restructuring of CEOC and other

(446)



(13)



(433)



(3,070)



1



(3,071)



2,638



85.9%


Loss from continuing operations, net of income taxes

(460)



(11)



(449)



(3,288)



5



(3,293)



2,844



86.4%


Discontinued operations, net of income taxes







3,293





3,293



(3,293)



(100.0)%


Net income/(loss)

(460)



(11)



(449)



5



5





(449)



(100.0)%


Net loss attributable to Caesars

(468)



(5)



(463)



(643)



2



(645)



182



28.2%


Basic and diluted loss per share

(3.14)





(3.14)



(4.38)





(4.38)



1.24



28.3%


Property EBITDA (1)

311



10



301



287



19



268



33



12.3%


Adjusted EBITDA (1)

303



10



293



269



20



249



44



17.7%


Adjusted EBITDA Margin (1)

30.7%



21.3%



31.2%



27.3%



24.7%



27.5%



--



--


 


Nine Months Ended September 30,


CEC Same-store


2017


2016


Change

(Dollars in millions, except per share data)

CEC


Baltimore (2)


CEC 
Same-store


CEC


Baltimore (2)


CEC 
Same-store


$


%

Casino revenues

$

1,617



$

178



$

1,439



$

1,633



$

234



$

1,399



40



2.9%


Net revenues

2,951



188



2,763



2,928



248



2,680



83



3.1%


Income from operations

401



18



383



155



31



124



259



*


Restructuring of CEOC and other

(2,319)



(13)



(2,306)



(5,333)





(5,333)



3,027



56.8%


Loss from continuing operations, net of income taxes

(2,410)



(13)



(2,397)



(5,663)



9



(5,672)



3,275



57.7%


Discontinued operations, net of income taxes







3,351





3,351



(3,351)



(100.0)%


Net income/(loss)

(2,410)



(13)



(2,397)



(2,312)



9



(2,321)



(76)



(3.3)%


Net loss attributable to Caesars

(2,456)



(6)



(2,450)



(3,028)



4



(3,032)



582



19.2%


Basic and diluted loss per share

(16.54)





(16.54)



(20.74)





(20.74)



4.20



20.3%


Property EBITDA (1)

912



38



874



867



53



814



60



7.4%


Adjusted EBITDA (1)

866



39



827



820



55



765



62



8.1%


Adjusted EBITDA Margin (1)

29.3%



20.7%



29.9%



28.0%



22.2%



28.5%



--



--


____________________

See "Footnotes to Tables" in the section "Cash and Available Revolver Capacity" later in this release.

Third Quarter of 2017 Financial Results

We view each casino property as an operating segment and through the third quarter aggregated all such casino properties into two reportable segments, which aligns with their ownership and underlying credit structures: Caesars Entertainment Resort Properties ("CERP") and Caesars Growth Partners, LLC ("CGP"). In the fourth quarter, our reporting segments will shift to operationally-focused regional segments, which is consistent with how we now manage the business. On September 23, 2016, CIE sold its social and mobile games business ("SMG Business") while retaining its World Series of Poker ("WSOP") and regulated online real money gaming businesses. The SMG Business represented the majority of CIE's operations and is being classified as a discontinued operation for all periods presented.

Segment results in this release are presented consistently with the way Caesars management assessed these results and allocated resources through the third quarter of 2017, which is a consolidated view that adjusts for the impact of certain transactions between reportable segments within Caesars, as described below. Accordingly, the results of certain reportable segments presented in this filing differ from the financial statement information presented in their stand-alone filings. "Other" includes parent, consolidating, and other adjustments to reconcile to consolidated Caesars results. All comparisons are to the same period of the previous year.

Net Revenues


Three Months Ended September 30,


Percent
Favorable/
(Unfavorable)


Nine Months Ended September 30,


Percent
Favorable/
(Unfavorable)

(Dollars in millions)

2017


2016



2017


2016


CERP

$

582



$

569



2.3%



$

1,698



$

1,659



2.4%


CGP

409



422



(3.1)%



1,265



1,283



(1.4)%


Other (3)

(5)



(5)



—%



(12)



(14)



14.3%


Consolidated

$

986



$

986



—%



$

2,951



$

2,928



0.8%


 

Income/(Loss) from Operations


Three Months Ended September 30,


Percent
Favorable/
(Unfavorable)


Nine Months Ended September 30,


Percent
Favorable/
(Unfavorable)

(Dollars in millions)

2017


2016



2017


2016


CERP

$

83



$

104



(20.2)%



$

311



$

293



6.1%


CGP

31



(109)



*



149



(22)



*


Other (3)

(28)



(39)



28.2%



(59)



(116)



49.1%


Consolidated

$

86



$

(44)



*



$

401



$

155



158.7%


 

Net Income/(Loss)


Three Months Ended September 30,


Percent
Favorable/
(Unfavorable)


Nine Months Ended September 30,


Percent
Favorable/
(Unfavorable)

(Dollars in millions)

2017


2016



2017


2016


CERP

$

5



$

6



(16.7)%



$

26



$

(2)



*


CGP

20



3,864



(99.5)%



48



3,914



(98.8)%


Other (3)

(485)



(3,865)



87.5%



(2,484)



(6,224)



60.1%


Consolidated

$

(460)



$

5



*



$

(2,410)



$

(2,312)



(4.2)%


 

Property EBITDA


Three Months Ended September 30,


Percent
Favorable/
(Unfavorable)


Nine Months Ended September 30,


Percent
Favorable/
(Unfavorable)

(Dollars in millions)

2017


2016



2017


2016


CERP

$

196



$

178



10.1%



$

559



$

526



6.3%


CGP

112



106



5.7%



350



337



3.9%


Other (3)

3



3



—%



3



4



(25.0)%


Consolidated

$

311



$

287



8.4%



$

912



$

867



5.2%


 

Adjusted EBITDA


Three Months Ended September 30,


Percent
Favorable/
(Unfavorable)


Nine Months Ended September 30,


Percent
Favorable/
(Unfavorable)

(Dollars in millions)

2017


2016



2017


2016


CERP

$

194



$

170



14.1%



$

543



$

507



7.1%


CGP

110



100



10.0%



339



323



5.0%


Other (3)

(1)



(1)



—%



(16)



(10)



(60.0)%


Consolidated

$

303



$

269



12.6%



$

866



$

820



5.6%


____________________

See "Footnotes to Tables" in the section "Cash and Available Revolver Capacity" later in this release.

CEC

Net revenues were flat year-over-year at $1.0 billion following the deconsolidation of the Horseshoe Baltimore results in August of 2017. On a same-store basis, CEC net revenues improved 3.8% to $939 million. The uplift was driven by an $20 million increase in same-store slot revenue, $8 million of additional room revenue on recently renovated room product, and $10 million of incremental revenue from operational revenue initiatives. Income from operations improved $130 million to $86 million in the third quarter of 2017, primarily due to one-time, accelerated stock-based compensation expenses of $145 million on the CIE entity in the prior year related to the sale of the SMG business. Net loss, before including the effect of non-controlling interest, was $0.5 billion. The loss was driven by an adjustment to CEC's estimate of the amount it paid upon emergence to support the restructuring of CEOC. Property and adjusted EBITDA improved to $311 million and $303 million, respectively in the third quarter of 2017. On a same-store basis, property EBITDA improved $33 million, or 12.3% largely on improved revenue. Same-store adjusted EBITDA climbed $44 million, or 17.7% in the third quarter of 2017, benefiting additionally from reductions in recurring corporate expenses.

CERP

CERP owns six casinos in the United States and The LINQ promenade, along with leasing Octavius Tower at Caesars Palace Las Vegas to CEOC and gaming space at The LINQ promenade to CGP.

Net revenue improved 2.3% to $582 million in the third quarter of 2017. The $13 million of additional revenue was generated by $14 million of gaming volume growth while improvements in hotel and food and beverage revenues increased $6 million, all slightly offset by a $6 million reduction in table games revenue resulting from unfavorable hold.

Income from operations fell $21 million to $83 million, due to $23 million of accelerated depreciation at the Flamingo and Harrah's Las Vegas for renovation projects underway. Net income declined $1 million, to $5 million, driven by accelerated depreciation, partially offset by interest savings on repriced debt. Adjusted EBITDA increased 14.1% to $194 million, supported by strong revenue growth and reductions in operating expenses.  Hold was not estimated to have an effect on operating income in the quarter relative to expectation.  Hold was unfavorable against prior year in an estimated range between $5 million and $10 million.

CGP

CGP owns six casinos in the United States, primarily in Las Vegas, as well as CIE. CIE owns and operates regulated online real money gaming and the WSOP tournaments and brand.

Net revenue was $409 million in the third quarter of 2017.  On a same-store basis, which removes the recently deconsolidated Horseshoe Baltimore results from both years, CGP revenues improved 6.2%, or $21 million. The improvement was driven by a 8.9% improvement in slot revenue.  Cash ADR improved 3.3% year over year, primarily due to renovations at Planet Hollywood.

CGP generated $31 million of income from operations and $20 million of net income. On a same-store basis, which removes the recently deconsolidated Horseshoe Baltimore property, as well as CIE for both years, income from operations fell $19 million and net income fell $10 million. Accelerated depreciation of $21 million for the Bally's Indigo Tower renovation project as well as a one-time NV Energy exit fee of $10 million drove the decline. Year-over-year interest expense savings of $9 million primarily from repricing CGPH's debt partially offset the reduced year-over-year impact on net income.

Hold was estimated to have an unfavorable effect on operating income relative to expected hold and a favorable effect of between zero and $5 million when compared with the prior year period.

CES

Caesars Enterprise Services ("CES") is a joint venture among CERP, CEOC, and a subsidiary of CGP. CES provides certain corporate and administrative services to their casino properties. In addition, effective October 2014, most of the properties owned by CERP and CGP are managed by CES.

Cash and Available Revolver Capacity

As of September 30, 2017, CEC was primarily a holding company with no independent operations, employees, or material debt issuances of its own. CEC's primary assets as of September 30, 2017 consisted of $122 million in cash and cash equivalents and its ownership interests in CEOC, CERP and CGP. CEC's cash included $92 million held by insurance captives. Each of the subsidiary entities comprising Caesars Entertainment's consolidated financial statements have separate debt agreements with restrictions on usage of the respective entity's capital resources. Prior to the completion of the merger on October 6, CGP was a variable interest entity consolidated by Caesars Entertainment. It was controlled by its sole voting member, CAC. CAC was a managing member of CGP and therefore controlled all decisions regarding liquidity and capital resources of CGP.


September 30, 2017

(In millions)

CERP


CGP


CES


Other (4)

Cash and cash equivalents

$

336



$

1,026



$

31



$

122


Revolver capacity

270



150






Revolver capacity drawn or committed to letters of credit








Total Liquidity

$

606



$

1,176



$

31



$

122


 

Footnotes to Tables

*

Not meaningful.

(1)

See the Reconciliation of Non-GAAP Financial Measures discussion later in this release for a reconciliation of Property EBITDA and Adjusted EBITDA.

(2)

Baltimore includes eliminations of intercompany transactions.

(3)

Other includes parent, consolidating, and other adjustments to reconcile to consolidated CEC results.

(4)

Other reflects CEC and its direct subsidiaries other than CERP and CGP.


Conference Call Information

Caesars Entertainment Corporation CZR will host a conference call at 2:30 p.m. Pacific Time Wednesday, November 1, 2017, to discuss its third quarter results, certain forward-looking information and other matters related to Caesars Entertainment Corporation. The call will be accessible in the Investor Relations section of www.caesars.com. Participants should dial (877) 637-3723 or (832) 412-1752 for international callers, and enter Conference ID 1625681 approximately 10 minutes before the call start time. A recording of the live call will be available on the company's web site 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 Entertainment Corporation

Caesars Entertainment is the world's most diversified casino-entertainment provider and the most geographically diverse U.S. casino-entertainment company.  Caesars Entertainment is mainly comprised of the following three entities: the wholly owned operating subsidiaries CEOC, LLC, Caesars Entertainment Resort Properties, LLC and Caesars Growth Partners, LLC. Since its beginning in Reno, Nevada, in 1937, Caesars Entertainment has grown through development of new resorts, expansions and acquisitions and its portfolio of subsidiaries now operate 47 casinos in 13 U.S. states and five countries.  Caesars Entertainment's resorts operate primarily under the Caesars®, Harrah's® and Horseshoe® brand names.  Caesars Entertainment's portfolio also includes the Caesars Entertainment UK family of casinos.  Caesars Entertainment 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.  Caesars Entertainment 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.

CEOC emerged from bankruptcy, and CEC and CAC merged, on October 6, 2017. Third quarter CEC results do not include CEOC or CAC. This press release at times refers to system-wide trends and dynamics during the third quarter, 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," "we," and "our" refer to Caesars Entertainment Corporation and its consolidated entities, and not CEOC unless otherwise stated or the context requires otherwise.

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. In particular, they include statements relating to, among other things, Caesars Entertainment's plans, strategies and opportunities following the restructuring of CEOC, Caesars Entertainments' expected market capitalization and certain refinancing transactions.   You can identify these statements by the fact that they do not relate strictly to historical or current facts. Further, these statements contain words such as "will," "may," "expect," "positioned," "future," "appears," or "pursue," or the negative or other variations thereof or comparable terminology. 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 Entertainment 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 Caesars Entertainment'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 impact of our new operating structure post-emergence;
  • 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 improvements in our business and results of operations through our property renovation investments, technology deployments, business process improvement initiatives and other continuous improvement initiatives;
  • the ability to take advantage of opportunities to grow our revenue;
  • the financial results of our consolidated businesses;
  • the impact of our substantial indebtedness and lease obligations and the restrictions in our debt and lease agreements;
  • access to available and reasonable financing on a timely basis, including the ability of Caesars Entertainment 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 the extensive governmental regulations to which we are subject, and 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, growth of online gaming, 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;
  • 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, regulatory disciplinary actions, and fines and taxation;
  • acts of war or terrorist incidents, (including the impact of the recent mass shooting in Las Vegas on tourism), 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;
  • a disruption, failure or breach of our network, information systems or other technology, or those of our vendors, on which we are dependent;
  • risks and costs associated with protecting the integrity and security of internal, employee and customer data;
  • access to insurance on reasonable terms for our assets; and
  • the impact, if any, of unfunded pension benefits under multiemployer 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 Entertainment 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)



Three Months Ended September 30,


Nine Months Ended September 30,

(In millions, except per share data)

2017


2016


2017


2016

Revenues








Casino

$

531



$

542



$

1,617



$

1,633


Food and beverage

198



198



591



599


Rooms

245



237



726



701


Other

150



140



428



398


Less: casino promotional allowances

(138)



(131)



(411)



(403)


Net revenues

986



986



2,951



2,928


Operating expenses








Direct








Casino

265



276



828



840


Food and beverage

97



99



286



292


Rooms

66



67



193



189


Property, general, administrative, and other

247



402



732



928


Depreciation and amortization

150



112



348



327


Corporate expense

39



39



112



120


Other operating costs

36



35



51



77


Total operating expenses

900



1,030



2,550



2,773


Income/(loss) from operations

86



(44)



401



155


Interest expense

(120)



(147)



(409)



(448)


Restructuring of CEOC and other

(446)



(3,070)



(2,319)



(5,333)


Loss from continuing operations before income taxes

(480)



(3,261)



(2,327)



(5,626)


Income tax benefit/(provision)

20



(27)



(83)



(37)


Loss from continuing operations, net of income taxes

(460)



(3,288)



(2,410)



(5,663)


Discontinued operations, net of income taxes



3,293





3,351


Net income/(loss)

(460)



5



(2,410)



(2,312)


Net income attributable to noncontrolling interests

(8)



(648)



(46)



(716)


Net loss attributable to Caesars

$

(468)



$

(643)



$

(2,456)



$

(3,028)










Loss per share - basic and diluted








Basic and diluted loss per share from continuing operations

$

(3.14)



$

(26.80)



$

(16.54)



$

(43.70)


Basic and diluted earnings per share from discontinued operations



22.42





22.96


Basic and diluted loss per share

$

(3.14)



$

(4.38)



$

(16.54)



$

(20.74)


 


CAESARS ENTERTAINMENT CORPORATION

CONSOLIDATED CONDENSED SUMMARY BALANCE SHEETS

(UNAUDITED)


(In millions)

September 30, 2017


December 31, 2016

Assets




Current assets




Cash and cash equivalents

$

1,515



$

1,513


Restricted cash

2,798



3,113


Other current assets

425



362


Total current assets

4,738



4,988


Property and equipment, net

7,123



7,446


Goodwill and other intangible assets

1,970



2,041


Restricted cash

101



5


Other long-term assets

421



414


Total assets

$

14,353



$

14,894






Liabilities and Stockholders' Deficit




Current liabilities




Accrued restructuring and support expenses

$

8,776



$

6,601


Current portion of long-term debt

39



89


Other current liabilities

1,022



1,058


Total current liabilities

9,837



7,748


Long-term debt

6,438



6,749


Other long-term liabilities

1,893



1,815


Total liabilities

18,168



16,312


Total Caesars stockholders' deficit

(5,617)



(3,177)


Noncontrolling interests

1,802



1,759


Total stockholders' deficit

(3,815)



(1,418)


Total liabilities and stockholders' deficit

$

14,353



$

14,894


 


CAESARS ENTERTAINMENT CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)



Nine Months Ended September 30,

(In millions)

2017


2016

Cash flows provided by operating activities

$

283



$

454


Cash flows from investing activities




Acquisitions of property and equipment, net of change in related payables

(245)



(147)


Deconsolidation of CRBH

(57)




Return of investment from discontinued operations



132


Contributions to discontinued operations



(144)


Proceeds from the sale and maturity of investments

28



38


Payments to acquire investments

(21)



(15)


Other



(3)


Cash flows used in investing activities

(295)



(139)


Cash flows from financing activities




Proceeds from long-term debt and revolving credit facilities

585



80


Debt issuance costs and fees

(19)




Repayments of long-term debt and revolving credit facilities

(673)



(255)


Repurchase of CIE shares



(609)


Distribution of CIE sale proceeds

(63)



(487)


Distributions to noncontrolling interest owners

(30)



(21)


Other

(5)



7


Cash flows used in financing activities

(205)



(1,285)


Cash flows from discontinued operations




Cash flows from operating activities



157


Cash flows from investing activities



4,384


Cash flows from financing activities



12


Net cash from discontinued operations



4,553






Change in cash, cash equivalents, and restricted cash classified as held for sale



111






Net increase/(decrease) in cash, cash equivalents, and restricted cash

(217)



3,694


Cash, cash equivalents, and restricted cash, beginning of period

4,631



1,394


Cash, cash equivalents, and restricted cash, end of period

$

4,414



$

5,088






Supplemental Cash Flow Information:




Cash paid for interest

$

319



$

363


Cash paid for income taxes



65


Non-cash investing and financing activities:




Change in accrued capital expenditures

2



1


 

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 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) income tax provision, (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. As a result of the sale of the SMG Business, we have determined that CIE stock-based compensation expense should be excluded from Property EBITDA as management no longer considers such expense to be indicative of Caesars Entertainment's ongoing consolidated or segment operating performance. Therefore, Property EBITDA has been recast for prior periods to be consistent to the current year presentation.

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 accounting principles generally accepted in the United States ("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 as exhibited in the following reconciliation, and is presented as a supplemental measure of the Company's performance. 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. In addition, compensation of management is in part determined by reference to certain of such financial information. As a result, we believe this supplemental information is useful to investors who are trying to understand the results 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 September 30, 2017


Three Months Ended September 30, 2016

(In millions)

CERP


CGP


Other (f)


CEC


CERP


CGP


Other (f)


CEC

Net income/(loss) attributable to company

$

5



$

26



$

(499)



$

(468)



$

6



$

3,897



$

(4,546)



$

(643)


Net income/(loss) attributable to noncontrolling interests



(6)



14



8





(33)



681



648


Net income from discontinued operations











(4,019)



726



(3,293)


Income tax (benefit)/provision

(5)





(15)



(20)





(2)



29



27


Restructuring of CEOC and other (a)

(1)



(25)



472



446



(1)



(1)



3,072



3,070


Interest expense

84



36





120



99



49



(1)



147


Income/(loss) from operations

83



31



(28)



86



104



(109)



(39)



(44)


Depreciation and amortization

86



64





150



63



48



1



112


Other operating costs (b)

16



10



10



36





16



19



35


Corporate expense

11



7



21



39



11



6



22



39


CIE stock-based compensation











145





145


Property EBITDA

196



112



3



311



178



106



3



287


Corporate expense

(11)



(7)



(21)



(39)



(11)



(6)



(22)



(39)


Stock-based compensation expense (c)

1



1



5



7



2





6



8


Other items (d)

8



4



12



24



1





12



13


Adjusted EBITDA

$

194



$

110



$

(1)



$

303



$

170



$

100



$

(1)



$

269


















Net Revenues

$

582



$

409



$

(5)



$

986



$

569



$

422



$

(5)



$

986


Adjusted EBITDA Margin (e)

33.3%



26.9%



20.0%



30.7%



29.9%



23.7%



20.0%



27.3%


 

CAESARS ENTERTAINMENT CORPORATION

SUPPLEMENTAL INFORMATION

RECONCILIATION OF NET INCOME/(LOSS) ATTRIBUTABLE TO CAESARS ENTERTAINMENT CORPORATION

TO PROPERTY EBITDA AND ADJUSTED EBITDA



Nine Months Ended September 30, 2017


Nine Months Ended September 30, 2016

(In millions)

CERP


CGP


Other (f)


CEC


CERP


CGP


Other (f)


CEC

Net income/(loss) attributable to company

$

26



$

55



$

(2,537)



$

(2,456)



$

(2)



$

3,940



$

(6,966)



$

(3,028)


Net income/(loss) attributable to noncontrolling interests



(7)



53



46





(26)



742



716


Net income from discontinued operations











(4,077)



726



(3,351)


Income tax (benefit)/provision

11





72



83



(2)



(6)



45



37


Restructuring of CEOC and other (a)

1



(30)



2,348



2,319





(2)



5,335



5,333


Interest expense

273



131



5



409



297



149



2



448


Income/(loss) from operations

311



149



(59)



401



293



(22)



(116)



155


Depreciation and amortization

196



152





348



196



131





327


Other operating costs (b)

18



26



7



51



5



19



53



77


Corporate expense

34



23



55



112



32



21



67



120


CIE stock-based compensation











188





188


Property EBITDA

559



350



3



912



526



337



4



867


Corporate expense

(34)



(23)



(55)



(112)



(32)



(21)



(67)



(120)


Stock-based compensation expense (c)

5



3



14



22



7



4



21



32


Other items (d)

13



9



22



44



6



3



32



41


Adjusted EBITDA

$

543



$

339



$

(16)



$

866



$

507



$

323



$

(10)



$

820


















Net Revenues

$

1,698



$

1,265



$

(12)



$

2,951



$

1,659



$

1,283



$

(14)



$

2,928


Adjusted EBITDA Margin (e)

32.0%



26.8%



133.3%



29.3%



30.6%



25.2%



71.4%



28.0%



___________________

(a)

Primarily represents CEC's estimated costs in connection with the restructuring of CEOC.

(b)

Amounts primarily represent costs incurred in connection with property openings and expansion projects at existing properties, costs associated with the development activities and reorganization activities, and/or recoveries associated with such items.

(c)

Amounts represent stock-based compensation expense related to shares, stock options, and restricted stock units granted to the Company's employees.

(d)

Amounts represent add-backs and deductions from EBITDA permitted under certain indentures. 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, and business optimization expenses.

(e)

Adjusted EBITDA margin is calculated as adjusted EBITDA divided by net revenues.

(f)

Amounts include consolidating adjustments, eliminating adjustments and other adjustments to reconcile to consolidated CEC Property EBITDA and Adjusted EBITDA.

 


CAESARS ENTERTAINMENT CORPORATION

SUPPLEMENTAL INFORMATION

ENTERPRISE WIDE INFORMATION


We are also providing certain supplemental information as if we had continued to consolidate CEOC throughout the third quarter of 2017. This information includes both stand-alone CEOC financials and key metrics for the third quarter of 2017, and certain financial information for CEC as if CEOC remained a consolidated entity during the quarter. This information may be different from CEOC's standalone results separately provided due to immaterial adjustments, rounding, and basis of presentation differences. CEC committed a material amount of payments to support CEOC's restructuring, which resulted in the reacquisition of CEOC's operations when CEOC emerged from bankruptcy on October 6, 2017. In addition, compensation of management is in part determined by reference to certain of such financial information. As a result, we believe this supplemental information is useful to investors who are trying to understand the results of the entire "Caesars" enterprise, including CEOC and consistent with the management services provided across the system's properties


As a result of the deconsolidation of CEOC, CEC generated no direct economic benefits from CEOC's results. This supplemental information is non-GAAP. It is not preferable to GAAP results but is used by management as an analytical tool to assess the results of all properties owned, managed or branded by a Caesars entity, regardless of consolidation. Additionally, the results are not necessarily indicative of future performance



Three Months Ended September 30,


Enterprise Wide
Same-store


2017


2016


Change

(Dollars in millions)

CEC


CEOC


Enterprise
Wide (a)


Less:
Baltimore


Enterprise
Wide Same-
store (b)


CEC


CEOC


Enterprise
Wide (a)


Less:
Baltimore


Enterprise
Wide Same-
store (b)


$


%

Net revenues

$

986



$

1,175



$

2,132



$

48



$

2,086



$

986



$

1,166



$

2,113



$

82



$

2,033



$

53



2.6%


Adjusted EBITDA

303



320



622



10



612



269



277



545



20



525



87



16.6%


Adjusted EBITDA Margin

30.7%



27.2%



29.2%



20.8%



29.3%



27.3%



23.8%



25.8%



24.4%



25.8%



--



--


___________________

(a)

Enterprise wide includes eliminations and other adjustments totaling ($29) million and ($39) million for the 2017 and 2016 periods, respectively.

(b)

Enterprise wide same- store includes eliminations and other adjustments of $2 million for both periods.

 

View original content with multimedia:http://www.prnewswire.com/news-releases/caesars-entertainment-reports-strong-financial-results-for-the-third-quarter-of-2017-300547820.html

SOURCE Caesars Entertainment Corporation

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