LAS VEGAS,
Oct. 31, 2012 -- Caesars
Entertainment Corporation (NASDAQ: CZR) today reported the following financial
results for the third quarter of 2012:
- Net revenues and Adjusted EBITDA remain flat
- August debt transactions consummated in October
extend maturities, boost liquidity and increase balance sheet cash
- First wave of Linq tenants announced in October
- Total Rewards receives customer-loyalty industry's
top award
The table below highlights certain
GAAP and non-GAAP financial measures:
|
Quarter
Ended
September 30,
|
|
Percent
Favorable/
(Unfavorable)
|
|
Nine
Months Ended
September 30,
|
|
Percent
Favorable/
(Unfavorable)
|
(Dollars
in millions, except per share data)
|
2012
|
|
2011
|
|
|
2012
|
|
2011
|
|
Net
revenues
|
$
|
2,198.4
|
|
|
$
|
2,189.7
|
|
|
0.4
|
%
|
|
$
|
6,572.5
|
|
|
$
|
6,467.5
|
|
|
1.6
|
%
|
(Loss)/income
from operations (1)
|
(220.6)
|
|
|
179.8
|
|
|
*
|
|
(82.3)
|
|
|
606.0
|
|
|
*
|
Loss
from continuing operations, net of income taxes
|
(506.2)
|
|
|
(184.6)
|
|
|
(174.2)
|
%
|
|
(1,054.8)
|
|
|
(506.5)
|
|
|
(108.3)
|
%
|
Income
from discontinued operations, net of income taxes
|
2.8
|
|
|
11.2
|
|
|
(75.0)
|
%
|
|
28.5
|
|
|
35.2
|
|
|
(19.0)
|
%
|
Net
loss attributable to Caesars
|
(505.5)
|
|
|
(164.0)
|
|
|
(208.2)
|
%
|
|
(1,027.8)
|
|
|
(467.0)
|
|
|
(120.1)
|
%
|
Diluted
loss per share (2)
|
(4.03)
|
|
|
(1.31)
|
|
|
(207.6)
|
%
|
|
(8.21)
|
|
|
(3.73)
|
|
|
(120.1)
|
%
|
Property
EBITDA (3)
|
512.2
|
|
|
497.2
|
|
|
3.0
|
%
|
|
1,587.0
|
|
|
1,523.8
|
|
|
4.1
|
%
|
Adjusted
EBITDA (4)
|
484.5
|
|
|
482.5
|
|
|
0.4
|
%
|
|
1,517.6
|
|
|
1,477.6
|
|
|
2.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Not
meaningful.
|
|
|
|
|
See
footnotes following Caesars Entertainment Operating Company, Inc.
results later in this release.
|
|
Management Commentary
"We continued to make significant
progress during the third quarter on a strategy designed to position
our company for future growth," said Gary
Loveman, Caesars Entertainment chairman, chief executive officer
and president. "We continued to refinance our nearest-term maturities
and improve our financial flexibility. In August
2012, we issued $750 million in
new debt due 2020, with proceeds used to refinance debt maturing in
2014 and 2015 and to increase liquidity. In conjunction with this
transaction, which closed in October, we extended the maturity of
approximately $958 million of term loans
from 2015 to 2018 and beyond, and repaid approximately $479 million of term loans under our credit
facilities.
"We moved forward with the
expansion of our distribution network into growth markets while we
continued to invest in our hub markets of Las
Vegas and Atlantic City,"
Loveman said. "We've started taking reservations for the highly
anticipated opening of the Nobu Hotel at Caesars Palace in Las Vegas next January. We've also
announced an eclectic and exciting mix of tenants who've already signed
contracts to be part of the Linq retail, dining and entertainment
experience at the center of the Las Vegas Strip.
"Our consortium with Rock Gaming
and others is proceeding with plans to open a gaming facility in Baltimore in the middle of 2014, and we
will apply for a license to build a full-scale gaming-destination
resort in Boston in an alliance with
Suffolk Downs," he said. "We've also begun booking meetings and
conventions for the spring 2013 opening of the new $450 million Horseshoe Cincinnati being
developed by Rock Ohio Caesars LLC, a joint venture in which we have a
20% ownership interest.
"Our focus on increasing the
relevance and reach of our core brands gained recognition when
COLLOQUY, a global provider of publications, education and research,
granted our Total Rewards customer-loyalty program its most prestigious
honor, the Master of Enterprise Loyalty Award," Loveman said. "What was
particularly gratifying was that we were nominated and selected for the
honor by external audiences and expert judges over all other leading
loyalty-marketing programs globally.
"Thanks primarily to growth in our
interactive operations and a continued emphasis on expense reductions,
we achieved about the same net revenues and Adjusted EBITDA as in the
third quarter of 2011, despite more competitive markets and the
challenges posed by the continuing weakness of the U.S. economy,"
Loveman said. "Reflecting the sluggish economic conditions, customer
visitation declined in all regions and spend per trip declined in
several regions. However, Las Vegas
saw a nearly 8 percent increase in per trip customer spending and Iowa-Missouri
and Louisiana-Mississippi experienced modest increases in
spend per trip.
"As we enter the fourth quarter,
we remain focused on increasing revenues, strengthening our capital
structure, investing in growth opportunities in new markets, increasing
our brand recognition and controlling expenses," he said. "In fact, our
efforts to streamline our cost structure resulted in Property EBITDA
gains in three of our six domestic regions, including the struggling
Atlantic City Region.
"During this quarter, we expect to
complete the previously announced sale of Harrah's St. Louis for $610
million and plan to use the proceeds from the sale to reinvest
in our core properties and invest in growth opportunities," Loveman
said. "One example is our anticipated renovation and rebranding of the
Imperial Palace, which we are renaming The Quad. We expect to upgrade
significant portions of that property, including the casino, public
spaces and guest rooms. The reconfiguration of the casino and its
entrances will enable direct access from the Linq and make the Quad
what we believe to be one of the most easily accessible casinos on the
Strip."
Financial Results
As a result of the pending sale,
the assets and liabilities of the Harrah's St.
Louis casino included in the sale are classified as held for
sale in the consolidated summary balance sheets shown later in this
release and the results of the Harrah's St.
Louis casino are presented as Discontinued Operations in the
consolidated summary of operations for the third quarter and nine-month
periods of 2012 and 2011, also shown later in this release.
Net revenues for the third quarter
of 2012 increased 0.4% compared with the year-earlier period, due
mainly to an increase in other revenues from the Company's interactive
operations, which include Playtika Ltd., and higher revenues from
Caesars' management companies resulting from the opening of Horseshoe
Cleveland earlier this year. These increases were largely offset by
lower casino revenues in all but the Las
Vegas and Illinois/Indiana regions.
Loss from operations for the third
quarter of 2012 was $220.6 million
compared with income from operations of $179.8
million in the prior-year quarter. This change was due mainly to
non-cash charges totaling $419.0 million,
comprised of intangible asset impairments of $247.0
million related to goodwill, $127.0
million related to trademarks and $32.0
million related to gaming rights, and a tangible asset
impairment of $13.0 million.
Net loss attributable to Caesars
for the third quarter of 2012 was $505.5 million,
up $341.5 million, or 208.2%, from the
third quarter of 2011. Higher net losses in the third quarter of 2012
reflect the impairment charges discussed above, increased interest
expense for the third quarter of 2012 and changes in the tax rate
benefit as further described in "Other Items" that follows later in
this release.
For the third quarter of 2012,
Property EBITDA and Adjusted EBITDA increased $15.0
million, or 3.0%, and $2.0 million,
or 0.4%, respectively, from 2011 primarily driven by the income impact
of higher revenues.
Performance Metrics
The Company measures its
performance in part through the tracking of trips by rated customers,
which means a customer whose gaming activity is tracked through the
Total Rewards customer-loyalty system ("trips"), and by spend per rated
customer trip ("spend per trip").
The following table reflects the
percentage increase/(decrease) in trips and spend per trip for the U.S.
regions for the third quarter and the nine-month periods of 2012,
compared with the same periods in 2011.
|
Quarter
Ended
September 30,
|
|
Nine
Months Ended
September 30,
|
|
Trips
|
|
Spend
per Trip
|
|
Trips
|
|
Spend
per Trip
|
Consolidated
Caesars
|
(4.9)
|
%
|
|
1.3
|
%
|
|
(1.9)
|
%
|
|
(0.6)
|
%
|
Las
Vegas region
|
(0.4)
|
%
|
|
7.8
|
%
|
|
2.3
|
%
|
|
0.8
|
%
|
Atlantic
City region:
|
|
|
|
|
|
|
|
Lodgers
|
(4.5)
|
%
|
|
(2.8)
|
%
|
|
(6.2)
|
%
|
|
(1.3)
|
%
|
Non-lodgers
|
(5.1)
|
%
|
|
(4.1)
|
%
|
|
(4.1)
|
%
|
|
(1.2)
|
%
|
All
other regions
|
(6.0)
|
%
|
|
(0.6)
|
%
|
|
(1.4)
|
%
|
|
(1.9)
|
%
|
Trips across all regions decreased in
the third quarter of 2012 when compared with the same period in 2011,
resulting in a decline of 4.9% on a consolidated basis, due mainly to
economic and competitive pressures as well as hurricane-related
property closures in the Louisiana/Mississippi region in August 2012. The
overall increase in spend per trip in the third quarter of 2012 was
attributable to a large increase in the Las
Vegas region due primarily to strength in the international
high-end segment, as well as modest increases in the Iowa/Missouri
and Louisiana/Mississippi regions.
On a consolidated basis in 2012, third
quarter cash average daily room rates decreased from $91 to $89, due
primarily to decreases in the Company's groups segment, and total
occupancy percentage remained flat when compared with 2011.
Results by Region
To provide more meaningful information
than would be possible on either a consolidated basis or an individual
property basis, the Company's casino properties and other operations
have been grouped into seven regions. Operating results for each of the
regions are provided below.
Las Vegas Region
Las Vegas Region properties include Bally's Las Vegas,
Bill's Gamblin' Hall & Saloon, Caesars Palace, Flamingo Las Vegas,
Harrah's Las Vegas, Imperial Palace,
Paris Las Vegas, Planet Hollywood Resort & Casino, and Rio.
|
Quarter
Ended
September 30,
|
|
Percent
Favorable/
(Unfavorable)
|
|
Nine
Months Ended
September 30,
|
|
Percent
Favorable/
(Unfavorable)
|
(Dollars
in millions)
|
2012
|
|
2011
|
|
|
2012
|
|
2011
|
|
Net
revenues
|
$
|
735.1
|
|
|
$
|
733.1
|
|
|
0.3
|
%
|
|
$
|
2,287.3
|
|
|
$
|
2,245.9
|
|
|
1.8
|
%
|
Income
from operations
|
62.4
|
|
|
88.2
|
|
|
(29.3)
|
%
|
|
310.4
|
|
|
348.4
|
|
|
(10.9)
|
%
|
Property
EBITDA (2)
|
163.9
|
|
|
172.9
|
|
|
(5.2)
|
%
|
|
589.6
|
|
|
599.3
|
|
|
(1.6)
|
%
|
Third-quarter net revenues were
relatively flat for the region when compared with 2011, as increased
casino revenues were mostly offset by decreases in food and beverage
and other revenues combined with higher promotional allowances.
Revenues rose slightly, despite the negative impact on results caused
by Project Linq construction activities, including the closure of
O'Shea's casino in May 2012, the closure
of several retail outlets at Harrah's Las
Vegas and the ongoing renovation of the Imperial Palace, which
the Company estimates to have reduced net revenues by approximately $10 million to $15 million. Trips were
relatively flat, while spend per trip increased 7.8%, due primarily to
strength in the international high-end segment. Hotel revenues in the
region were relatively flat when compared with 2011, due in part to the
662 additional Octavius Tower rooms,
offset by a decrease in cash average daily room rates from $89 in 2011 to $87
in 2012 and a decrease in total occupancy percentage of 1.8 percentage
points.
Income from operations decreased for
the third quarter of 2012 by 29.3% primarily due to increases in
property operating expenses, non-cash intangible asset impairment
charges of $3.0 million and an increase
in write-downs, reserves, and project opening costs, net of recoveries,
associated with demolition costs to prepare for Project Linq.
Property EBITDA for the third quarter
of 2012 was lower than in 2011, mainly resulting from the increase in
property operating expenses which more than offset the slight increase
in net revenues. Also, the Company estimates that the negative impact
caused by Project Linq construction activities was to reduce Property
EBITDA by approximately $5 million to $10
million.
Construction on Project Linq, which is
scheduled to open in phases in the second half of 2013, continues.
Caesars recently announced the first wave of tenants who will populate
the retail, dining and entertainment experience between the Company's
Flamingo and Imperial Palace casinos, on the east side of the Las Vegas
Strip. The tenants are aimed at appealing to Gen X and Gen Y visitors
and include trend-setting brands such as Brooklyn Bowl, F.A.M.E., Yard
House, Tilted Kilt and others that, combined, will constitute more than
70% of the 230,000 square feet of the space available for lease.
Atlantic City Region
Atlantic City
region properties include Bally's Atlantic City, Caesars Atlantic City,
Harrah's Atlantic City, Harrah's Philadelphia (formerly known as Harrah's
Chester), and Showboat Atlantic City.
|
Quarter
Ended
September 30,
|
|
Percent
Favorable/
(Unfavorable)
|
|
Nine
Months Ended
September 30,
|
|
Percent
Favorable/
(Unfavorable)
|
(Dollars
in millions)
|
2012
|
|
2011
|
|
|
2012
|
|
2011
|
|
Net
revenues
|
$
|
477.3
|
|
|
$
|
497.5
|
|
|
(4.1)
|
%
|
|
$
|
1,346.2
|
|
|
$
|
1,424.2
|
|
|
(5.5)
|
%
|
Income
from operations
|
47.3
|
|
|
39.7
|
|
|
19.1
|
%
|
|
82.4
|
|
|
93.6
|
|
|
(12.0)
|
%
|
Property
EBITDA (2)
|
99.8
|
|
|
89.5
|
|
|
11.5
|
%
|
|
236.9
|
|
|
240.3
|
|
|
(1.4)
|
%
|
Net revenues for the third quarter of
2012 in the Atlantic City region were
down $20.2 million, or 4.1%, from 2011,
due mainly to lower casino revenues, largely resulting from a decline
in trips. Trips by lodgers and non-lodgers declined 4.5% and 5.1%,
respectively, in the third quarter of 2012 from 2011 due mainly to new
competition in the region. Spend per trip for lodgers and non-lodger
decreased 2.8% and 4.1%, respectively. The Company expects the market
to continue to be challenged by local and regional competition. Income
from operations and Property EBITDA increased 19.1% and 11.5%,
respectively, in the third quarter of 2012 compared with 2011 due
mainly to decreased property operating expenses resulting from cost
savings initiatives and lower property tax assessments in Atlantic City, partially offset by the
decline in net revenues.
Louisiana/Mississippi
Region
Louisiana/Mississippi region properties include Grand
Casino Biloxi, Harrah's New Orleans,
Harrah's Tunica, Horseshoe Bossier City, Harrah's Horseshoe Tunica,
Harrah's Louisiana Downs, and Tunica Roadhouse Hotel and Casino.
|
Quarter
Ended
September
30,
|
|
Percent
Favorable/
(Unfavorable)
|
|
Nine
Months Ended
September 30,
|
|
Percent
Favorable/
(Unfavorable)
|
(Dollars
in millions)
|
2012
|
|
2011
|
|
|
2012
|
|
2011
|
|
Net
revenues
|
$
|
266.2
|
|
|
$
|
291.7
|
|
|
(8.7)
|
%
|
|
$
|
843.5
|
|
|
$
|
845.5
|
|
|
(0.2)
|
%
|
(Loss)/income
from operations
|
(183.0)
|
|
|
35.4
|
|
|
*
|
|
(271.2)
|
|
|
106.0
|
|
|
*
|
Property
EBITDA (2)
|
56.2
|
|
|
60.3
|
|
|
(6.8)
|
%
|
|
194.5
|
|
|
183.6
|
|
|
5.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Not
meaningful.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third quarter of 2012 net revenues in
the Louisiana/Mississippi region decreased $25.5 million, or 8.7%, from 2011. Revenues
were negatively impacted by the closures of two casinos in the region
as a result of Hurricane Isaac in August 2012,
which contributed to a 6.2% decline in trips. Loss from operations was $183.0 million in the third quarter of 2012
compared with income from operations of $35.4
million in 2011. This change was due primarily to non-cash
intangible asset impairment charges of $176.0
million, as well as a non-cash tangible asset impairment charge
of $13.0 million and a $20.2 million charge for exit activities
related to the halted development project in Biloxi,
Mississippi. Also contributing to the loss from operations is the
income impact of lower revenues and non-recurring costs associated with
hurricane-related damage to the closed properties. The Company
estimates that the negative impact of Hurricane Isaac on its income
from operations and Property EBITDA was approximately $4 million.
Iowa/Missouri
Region
Iowa/Missouri region properties include Harrah's
Council Bluffs, Harrah's North Kansas City, and Horseshoe Council
Bluffs. On May 7, 2012, Caesars entered
into an agreement to sell Harrah's St Louis;
therefore, the results in the table below exclude those of Harrah's St. Louis for all periods.
|
Quarter
Ended
September 30,
|
|
Percent
Favorable/
(Unfavorable)
|
|
Nine
Months Ended
September 30,
|
|
Percent
Favorable/
(Unfavorable)
|
(Dollars
in millions)
|
2012
|
|
2011
|
|
|
2012
|
|
2011
|
|
Net
revenues
|
$
|
117.0
|
|
|
$
|
119.9
|
|
|
(2.4)
|
%
|
|
$
|
350.6
|
|
|
$
|
352.1
|
|
|
(0.4)
|
%
|
Income
from operations
|
38.8
|
|
|
27.5
|
|
|
41.1
|
%
|
|
94.6
|
|
|
79.7
|
|
|
18.7
|
%
|
Property
EBITDA (2)
|
46.3
|
|
|
35.5
|
|
|
30.4
|
%
|
|
116.9
|
|
|
103.1
|
|
|
13.4
|
%
|
Net revenues in the third quarter of
2012 in the Iowa/Missouri region decreased $2.9 million, or 2.4%, from 2011 due mainly to
a decline in casino revenues resulting from new competition in the Kansas City market. Income from operations
and Property EBITDA increased for the third quarter of 2012 from 2011
due mainly to a reduction in property operating expenses resulting from
the refinement of estimates of costs remaining in the discontinued
operations of the Harrah's St. Louis
casino as a result of the imminent closing of the transaction.
Illinois/Indiana
Region
Illinois/Indiana region properties include Harrah's Joliet, Harrah's Metropolis, Horseshoe
Hammond, and Horseshoe Southern Indiana.
|
Quarter
Ended
September 30,
|
|
Percent
Favorable/
(Unfavorable)
|
|
Nine
Months Ended
September 30,
|
|
Percent
Favorable/
(Unfavorable)
|
(Dollars
in millions)
|
2012
|
|
2011
|
|
|
2012
|
|
2011
|
|
Net
revenues
|
$
|
263.5
|
|
|
$
|
260.2
|
|
|
1.3
|
%
|
|
$
|
802.7
|
|
|
$
|
806.1
|
|
|
(0.4)
|
%
|
Income
from operations
|
40.5
|
|
|
30.5
|
|
|
32.8
|
%
|
|
121.6
|
|
|
110.2
|
|
|
10.3
|
%
|
Property
EBITDA (2)
|
59.7
|
|
|
50.1
|
|
|
19.2
|
%
|
|
179.6
|
|
|
173.0
|
|
|
3.8
|
%
|
Third quarter of 2012 net revenues in
the Illinois/Indiana
region increased slightly from 2011. Spend per trip declined while
increased competitive pressures in the region resulted in fewer trips,
despite the reopening earlier this year of the bridge that allows
direct access by customers to the Company's Southern
Indiana property, which closure affected the property starting
in early September 2011. Income from
operations for the third quarter of 2012 increased 32.8% from the same
period in 2011 due mainly to higher revenues together with reduced
property operating expenses as a result of cost savings initiatives.
The increase in Property EBITDA reflects higher revenues and reduced
property operating expenses mentioned above.
Other Nevada Region
Other Nevada Region properties include
Harrah's Lake Tahoe, Harrah's Laughlin, Harrah's Reno, and Harveys Lake Tahoe.
|
Quarter
Ended
September 30,
|
|
Percent
Favorable/
(Unfavorable)
|
|
Nine
Months Ended
September 30,
|
|
Percent
Favorable/
(Unfavorable)
|
(Dollars
in millions)
|
2012
|
|
2011
|
|
|
2012
|
|
2011
|
|
Net
revenues
|
$
|
134.1
|
|
|
$
|
140.9
|
|
|
(4.8)
|
%
|
|
$
|
336.4
|
|
|
$
|
355.1
|
|
|
(5.3)
|
%
|
(Loss)/Income
from operations
|
(75.2)
|
|
|
30.3
|
|
|
*
|
|
(61.5)
|
|
|
48.4
|
|
|
*
|
Property
EBITDA (2)
|
38.5
|
|
|
40.9
|
|
|
(5.9)
|
%
|
|
74.0
|
|
|
80.3
|
|
|
(7.8)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Not
meaningful.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third quarter of 2012 net revenues
decreased $6.8 million, or 4.8%, from
the same period in 2011 due mainly to a decline in casino revenues.
Trips to the properties in the region, as well as spend per trip,
declined in the third quarter of 2012 compared with 2011 due to local
competitive pressures, and the Company expects the market to continue
to be challenged. There was a loss from operations of $75.2 million in the third quarter of 2012
compared with income from operations of $30.3
million in 2011. This change was due mainly to non-cash
intangible asset impairment charges of $103.0
million recorded in the 2012 quarter. Property EBITDA decreased
slightly from 2011 due mainly to the income impact of lower revenues,
partly offset by reduced property operating expenses.
Managed, International, and Other
The Managed region includes companies
that operate three Indian-owned casinos, as well as Horseshoe Cleveland
and Caesars Windsor, and the results of Thistledown Racetrack
("Thistledown") through August 2012 when
the racetrack was contributed to Rock Ohio Caesars, LLC, a joint
venture in which Caesars holds a 20% ownership interest. Subsequent to August 2012, the Managed region includes the
results of the subsidiary that manages Thistledown. The International
region includes the results of Caesars' international operations. The
Other region is comprised of corporate expenses, including
administrative, marketing, and development costs, income from certain
non-consolidated affiliates, and the results of Caesars Interactive
Entertainment, Inc., which consists of the businesses related to the
World Series of Poker® ("WSOP") brand, an online
real-money business in the U.K. and alliances with online gaming
providers in Italy and France, and the results of Playtika Ltd., a
social media and mobile games developer, since since it was acquired in
May 2011.
|
Quarter
Ended
September 30,
|
|
Percent
Favorable/
(Unfavorable)
|
|
Nine
Months Ended
September 30,
|
|
Percent
Favorable/
(Unfavorable)
|
(Dollars
in millions)
|
2012
|
|
2011
|
|
|
2012
|
|
2011
|
|
Net
revenues
|
|
|
|
|
|
|
|
|
|
|
|
Managed
|
$
|
37.0
|
|
|
$
|
13.6
|
|
|
172.1
|
%
|
|
$
|
62.0
|
|
|
$
|
36.9
|
|
|
68.0
|
%
|
International
|
105.7
|
|
|
110.9
|
|
|
(4.7)
|
%
|
|
340.6
|
|
|
336.2
|
|
|
1.3
|
%
|
Other
|
62.5
|
|
|
21.8
|
|
|
186.7
|
%
|
|
203.2
|
|
|
65.4
|
|
|
210.7
|
%
|
Total
net revenues
|
$
|
205.2
|
|
|
$
|
146.3
|
|
|
40.3
|
%
|
|
$
|
605.8
|
|
|
$
|
438.5
|
|
|
38.2
|
%
|
(Loss)/income
from operations
|
|
|
|
|
|
|
|
|
|
|
|
Managed
|
$
|
(2.1)
|
|
|
$
|
2.2
|
|
|
*
|
|
$
|
3.0
|
|
|
$
|
5.0
|
|
|
(40.0)
|
%
|
International
|
(3.9)
|
|
|
(0.3)
|
|
|
*
|
|
(89.0)
|
|
|
19.7
|
|
|
*
|
Other
|
(145.3)
|
|
|
(73.8)
|
|
|
(96.9)
|
%
|
|
(272.5)
|
|
|
(205.0)
|
|
|
(32.9)
|
%
|
Total
loss from operations
|
$
|
(151.3)
|
|
|
$
|
(71.9)
|
|
|
(110.4)
|
%
|
|
$
|
(358.5)
|
|
|
$
|
(180.3)
|
|
|
(98.8)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Not
meaningful.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues in the third quarter of
2012 for Managed, International, and Other increased $58.9 million, or 40.3%, from 2011, due
primarily to higher revenues associated with the Company's growing
interactive operations. Net revenue increases were also attributable to
the opening of a new managed casino, Horseshoe Cleveland, which began
operations in May 2012, including an
increase in reimbursable expenses for Horseshoe Cleveland that is
presented on a gross revenue basis, thus resulting in an increase in
net revenues and an equally offsetting increase in operating expenses.
Loss from operations increased $79.4 million
in the third quarter of 2012 from 2011, due mainly to non-cash
intangible asset impairment charges of $124.0
million in the 2012 quarter and increased corporate expenses.
Increases in corporate expenses were attributable to the consolidation
of certain functions at corporate, and increased stock-based
compensation expense.
Other Items
Interest expense, net of interest
capitalized, increased by $65.4 million,
or 14.5%, in the third quarter of 2012, due primarily to higher
interest rates as a result of extending the maturities of the Company's
debt combined with higher debt balances compared with the year-ago
quarter, and a $66.2 million decrease in
mark-to-market gains on derivatives resulting from $6.2 million of gains in 2012 compared with
gains of $72.4 million in 2011,
partially offset by $33.9 million of
lower amortization of deferred losses in accumulated other
comprehensive loss. Interest expense is reported net of interest
capitalized of $9.5 million and $11.6 million for the third quarter of 2012
and 2011, respectively. Interest capitalized in the third quarter of
2012 is primarily related to the Project Linq.
The effective tax rate benefit for the
quarter ended September 30, 2012 and September 30, 2011, was 30.8% and 29.6%,
respectively. The reason for the increase in the quarterly rate at September 30, 2012 is that the negative impact
to the 2012 rate, which is primarily caused by nondeductible goodwill
impairments, was relatively less than the negative impact to the 2011
rate, which was primarily caused by nondeductible foreign losses and
nondeductible losses on company-owned life insurance policies.
Caesars Entertainment has undertaken
comprehensive cost-reduction efforts to rightsize expenses with
business levels through its implementation of "Project Renewal," an
initiative designed to reinvent certain aspects of the Company's
functional and operating units to gain significant further cost
reductions and streamline its operations. As a part of Project Renewal,
the Company designed a shared-services organization that will enable
more efficient decision making and sharing of best practices. Caesars
anticipates that the Company will have a permanently lower cost
structure and will benefit from greater concentration of specified
talent and quicker decision making. The Company estimates that Project
Renewal and other cost-savings programs produced $50.8
million in incremental cost savings for the third quarter of
2012 compared with the same period in 2011. Additionally, as of
September 30, 2012, we expect that these cost-savings programs will
produce additional annual cost savings of $204.3
million, based on the full implementation of current projects
that are in process. As the Company firms up cost reduction activities,
this amount could change.
Caesars Entertainment Operating
Company, Inc. Results
As a substantial portion of the debt of
Caesars Entertainment's consolidated group is issued by CEOC, the
Company believes it is meaningful to also provide information on the
results of operations of CEOC. Results for CEOC are summarized below.
CEOC's Summary of Operations, Supplemental Information, and
Reconciliation of Net Loss Attributable to CEOC to Adjusted EBITDA, LTM
Adjusted EBITDA-Pro Forma, and LTM Adjusted EBITDA-Pro Forma - CEOC
Restricted, can be found at the end of this release.
|
Quarter
Ended
September 30,
|
|
Percent
Favorable/
(Unfavorable)
|
|
Nine
Months Ended
September 30,
|
|
Percent
Favorable/
(Unfavorable)
|
(Dollars
in millions)
|
2012
|
|
2011
|
|
|
2012
|
|
2011
|
|
Net
revenues
|
$
|
1,640.3
|
|
|
$
|
1,669.2
|
|
|
(1.7)
|
%
|
|
$
|
4,928.9
|
|
|
$
|
4,964.7
|
|
|
(0.7)
|
%
|
(Loss)/income
from operations (1)
|
(279.3)
|
|
|
133.9
|
|
|
*
|
|
(237.6)
|
|
|
485.3
|
|
|
*
|
Loss
from continuing operations, net of income taxes
|
(533.4)
|
|
|
(200.2)
|
|
|
(166.4)
|
%
|
|
(1,165.7)
|
|
|
(571.7)
|
|
|
(103.9)
|
%
|
Income
from discontinued operations, net of income taxes
|
2.8
|
|
|
11.2
|
|
|
(75.0)
|
%
|
|
28.5
|
|
|
35.2
|
|
|
(19.0)
|
%
|
Net
loss attributable to CEOC
|
(531.3)
|
|
|
(179.8)
|
|
|
(195.5)
|
%
|
|
(1,138.9)
|
|
|
(532.5)
|
|
|
(113.9)
|
%
|
Property
EBITDA (3)
|
384.0
|
|
|
388.5
|
|
|
(1.2)
|
%
|
|
1,227.8
|
|
|
1,212.5
|
|
|
1.3
|
%
|
Adjusted
EBITDA (4)
|
351.3
|
|
|
372.3
|
|
|
(5.6)
|
%
|
|
1,136.8
|
|
|
1,162.5
|
|
|
(2.2)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Not
meaningful.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Loss
from operations for Caesars includes intangible and tangible asset
impairment charges of $419.0 million and $720.5 million in the third
quarter and the nine-month period of 2012, respectively. Loss from
operations for CEOC includes intangible and tangible asset impairment
charges of $416.0 million and $717.5 million in the third quarter and
the nine-month period of 2012, respectively. Income from operations for
Caesars and CEOC included intangible and tangible asset impairment
charges of $27.1 million for both the third quarter and nine-month
period of 2011.
|
|
|
(2)
|
Diluted
loss per share for the periods shown includes earnings per share from
Discontinued Operations in the third quarter and nine-month period of
2012 of $0.02 and $0.23 per share, respectively and earnings per share
from Discontinued Operations for the third quarter and nine-month
period of 2011 of $0.09 and $0.28 per share, respectively. On February
8, 2012, the Company effected a 1.742-for-one split of its common
stock. All applicable per-share data presented herein has been
retroactively adjusted to give effect to this stock split.
|
|
|
(3)
|
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.
|
|
|
(4)
|
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. Adjusted EBITDA does not include the pro forma effect of
adjustments related to properties and yet-to-be-realized cost savings
from the Company's profitability improvement programs.
|
Caesars Entertainment Corporation
(NASDAQ: CZR) will host a conference call at 2 p.m. Pacific Time Wednesday, October 31, 2012,
to review its third-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 877-637-3723, or
832-412-1752 for international callers, and enter Conference ID
50057754 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.
*****
Caesars Entertainment Corporation is
the world's most diversified casino-entertainment company. Since its
beginning in Reno, Nevada, 75 years
ago, Caesars has grown through development of new resorts, expansions
and acquisitions and now operates casinos on four continents. The
company's resorts operate primarily under the Caesars®,
Harrah's® and Horseshoe® brand names. Caesars also owns the
World Series of Poker® and the London Clubs International family of
casinos. Caesars 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. We are committed to environmental sustainability
and energy conservation and recognize the importance of being a
responsible steward of the environment. For more information, please
visit www.caesars.com.
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. These statements contain words
such as "may," "will," "project," "might," "expect," "believe,"
"anticipate," "intend," "could," "would," "estimate," "continue,"
"pursue," 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, 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, as well as 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 impact of the Company's significant indebtedness;
- the effects of local and national economic, credit, and
capital market conditions on the economy, in general, and on the gaming
industry, in particular;
- the ability to realize the expense reductions from cost
savings programs;
- access to available and reasonable financing on a timely
basis;
- the ability of the Company's customer-tracking, customer
loyalty, and yield-management programs to continue to increase customer
loyalty and same-store or hotel sales;
- changes in laws, including increased tax rates, smoking
bans, regulations or accounting standards, third-party relations and
approvals, and decisions, disciplines, and fines of courts, regulators,
and governmental bodies;
- the ability to recoup costs of capital investments through
higher revenues;
- abnormal gaming holds ("gaming hold" is the amount of money
that is retained by the casino from wagers by customers);
- the ability to timely and cost-effectively integrate
companies that the Company acquires into its operations;
- the effects of competition, including locations of
competitors and operating and market competition;
- the potential difficulties in employee retention and
recruitment as a result of the Company's 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, regulatory
disciplinary actions, and fines and taxation;
- the effects of environmental and structural building
conditions relating to the Company's properties;
- access to insurance on reasonable terms for the Company's
assets;
- acts of war or terrorist incidents, severe weather
conditions, uprisings, or natural disasters; 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
SUMMARY OF OPERATIONS
|
(UNAUDITED)
|
|
|
|
|
|
Quarter
Ended
September 30,
|
|
Nine
Months Ended
September 30,
|
(In
millions, except per share data)
|
2012
|
|
2011
|
|
2012
|
|
2011
|
Net
revenues
|
$
|
2,198.4
|
|
|
$
|
2,189.7
|
|
|
$
|
6,572.5
|
|
|
$
|
6,467.5
|
|
Property
operating expenses
|
(1,690.8)
|
|
|
(1,715.4)
|
|
|
(5,038.5)
|
|
|
(5,015.2)
|
|
Depreciation
and amortization
|
(182.0)
|
|
|
(176.8)
|
|
|
(546.6)
|
|
|
(518.6)
|
|
Write-downs,
reserves, and project opening costs, net of recoveries
|
(32.6)
|
|
|
(12.5)
|
|
|
(63.4)
|
|
|
(60.0)
|
|
Intangible
and tangible asset impairment charges
|
(419.0)
|
|
|
(27.1)
|
|
|
(720.5)
|
|
|
(27.1)
|
|
Income/(loss)
on interests in non-consolidated affiliates
|
1.5
|
|
|
(1.1)
|
|
|
(8.8)
|
|
|
(4.2)
|
|
Corporate
expense
|
(51.8)
|
|
|
(36.5)
|
|
|
(145.2)
|
|
|
(115.1)
|
|
Acquisition
and integration costs
|
(1.1)
|
|
|
(1.3)
|
|
|
(2.2)
|
|
|
(3.6)
|
|
Amortization
of intangible assets
|
(43.2)
|
|
|
(39.2)
|
|
|
(129.6)
|
|
|
(117.7)
|
|
(Loss)/income
from operations
|
(220.6)
|
|
|
179.8
|
|
|
(82.3)
|
|
|
606.0
|
|
Interest
expense, net of interest capitalized
|
(515.7)
|
|
|
(450.3)
|
|
|
(1,574.3)
|
|
|
(1,448.3)
|
|
Gains
on early extinguishments of debt
|
—
|
|
|
—
|
|
|
79.5
|
|
|
47.9
|
|
Other
income, including interest income
|
4.6
|
|
|
8.2
|
|
|
19.4
|
|
|
16.7
|
|
Loss
from continuing operations before income taxes
|
(731.7)
|
|
|
(262.3)
|
|
|
(1,557.7)
|
|
|
(777.7)
|
|
Benefit
for income taxes
|
225.5
|
|
|
77.7
|
|
|
502.9
|
|
|
271.2
|
|
Loss
from continuing operations, net of income taxes
|
(506.2)
|
|
|
(184.6)
|
|
|
(1,054.8)
|
|
|
(506.5)
|
|
Discontinued
operations
|
|
|
|
|
|
|
|
Income
from discontinued operations
|
4.6
|
|
|
18.4
|
|
|
46.5
|
|
|
57.9
|
|
Provision
for income taxes
|
(1.8)
|
|
|
(7.2)
|
|
|
(18.0)
|
|
|
(22.7)
|
|
Income
from discontinued operations, net of income taxes
|
2.8
|
|
|
11.2
|
|
|
28.5
|
|
|
35.2
|
|
Net
loss
|
(503.4)
|
|
|
(173.4)
|
|
|
(1,026.3)
|
|
|
(471.3)
|
|
Less:
(income)/net loss attributable to non-controlling interests
|
(2.1)
|
|
|
9.4
|
|
|
(1.5)
|
|
|
4.3
|
|
Net
loss attributable to Caesars
|
$
|
(505.5)
|
|
|
$
|
(164.0)
|
|
|
$
|
(1,027.8)
|
|
|
$
|
(467.0)
|
|
|
|
|
|
|
|
|
|
(Loss)/earnings
per share - basic and diluted
|
|
|
|
|
|
|
|
Loss
per share from continuing operations
|
$
|
(4.05)
|
|
|
$
|
(1.40)
|
|
|
$
|
(8.44)
|
|
|
$
|
(4.01)
|
|
Earnings
per share from discontinued operations
|
0.02
|
|
|
0.09
|
|
|
0.23
|
|
|
0.28
|
|
Net
loss per share
|
$
|
(4.03)
|
|
|
$
|
(1.31)
|
|
|
$
|
(8.21)
|
|
|
$
|
(3.73)
|
|
CAESARS
ENTERTAINMENT CORPORATION
|
CONSOLIDATED
SUMMARY BALANCE SHEETS
|
(UNAUDITED)
|
|
|
|
|
(In
millions)
|
September
30, 2012
|
|
December
31, 2011
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash
and cash equivalents
|
$
|
1,189.4
|
|
|
$
|
894.6
|
|
Restricted Cash (a)
|
799.4
|
|
|
66.6
|
|
Assets held for sale (b)
|
9.7
|
|
|
11.6
|
|
Other
current assets
|
881.3
|
|
|
864.4
|
|
Total
current assets
|
2,879.8
|
|
|
1,837.2
|
|
Property
and equipment, net
|
16,588.6
|
|
|
17,069.9
|
|
Goodwill
and other intangible assets
|
7,143.5
|
|
|
7,723.6
|
|
Restricted
cash
|
269.3
|
|
|
451.1
|
|
Assets
held for sale (b)
|
592.3
|
|
|
593.4
|
|
Other
long-term assets
|
869.4
|
|
|
840.4
|
|
|
$
|
28,342.9
|
|
|
$
|
28,515.6
|
|
Liabilities
and Stockholders' Equity
|
|
|
|
Current
liabilities
|
|
|
|
Current portion of long-term debt (a)
|
$
|
797.3
|
|
|
$
|
40.4
|
|
Liabilities held for sale (b)
|
8.2
|
|
|
10.1
|
|
Other
current liabilities
|
1,819.8
|
|
|
1,552.3
|
|
Total
current liabilities
|
2,625.3
|
|
|
1,602.8
|
|
Long-term
debt
|
19,961.2
|
|
|
19,759.5
|
|
Other
long-term liabilities
|
5,641.7
|
|
|
6,099.9
|
|
|
28,228.2
|
|
|
27,462.2
|
|
Total
Caesars stockholders' equity
|
33.4
|
|
|
1,006.7
|
|
Non-controlling
interests
|
81.3
|
|
|
46.7
|
|
Total
equity
|
114.7
|
|
|
1,053.4
|
|
|
$
|
28,342.9
|
|
|
$
|
28,515.6
|
|
|
|
|
|
|
|
|
|
(a)
The balance of restricted cash at September 30, 2012 includes $750.0
million of escrow proceeds related to the Company's August 22, 2012
bond offering. The $750.0 million debt obligation is included in the
current portion of long-term debt until the escrow conditions are met,
at which time, the cash will be released from restriction and the debt
will be classified as long-term.
|
(b)
These balances relate to the sale of the Harrah's St. Louis casino
which is expected to close in the fourth quarter of 2012.
|
CAESARS
ENTERTAINMENT CORPORATION
|
SUPPLEMENTAL
INFORMATION
|
RECONCILIATION
OF NET LOSS ATTRIBUTABLE TO CAESARS ENTERTAINMENT CORPORATION
|
TO
PROPERTY EBITDA
|
(UNAUDITED)
|
|
Property
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 the Company's
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.
|
|
The
following tables reconcile net loss attributable to Caesars to Property
EBITDA for the periods indicated.
|
|
|
Quarter
Ended September 30, 2012
|
(In
millions)
|
Las
Vegas
Region
|
|
Atlantic
City
Region
|
|
Louisiana/
Mississippi
Region
|
|
Iowa/
Missouri
Region
|
|
Illinois/
Indiana
Region
|
|
Other
Nevada
Region
|
|
Managed,
Int'l and Other
|
|
Discontinued
Operations
|
|
Total
|
Net
loss attributable to Caesars
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(505.5)
|
|
Net
income attributable to non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.1
|
|
Net
loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(503.4)
|
|
Income
from discontinued operations, net of income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2.8)
|
|
Net
loss from continuing operations, net of income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(506.2)
|
|
Benefit
for income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(225.5)
|
|
Loss
from continuing operations before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(731.7)
|
|
Other
income, including interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4.6)
|
|
Gains
on early extinguishments of debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
Interest
expense, net of interest capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
515.7
|
|
Income/(loss)
from operations
|
$
|
62.4
|
|
|
$
|
47.3
|
|
|
$
|
(183.0)
|
|
|
$
|
38.8
|
|
|
$
|
40.5
|
|
|
$
|
(75.2)
|
|
|
$
|
(151.4)
|
|
|
|
|
(220.6)
|
|
Depreciation
and amortization
|
66.9
|
|
|
44.6
|
|
|
19.7
|
|
|
7.5
|
|
|
19.0
|
|
|
7.2
|
|
|
17.1
|
|
|
|
|
182.0
|
|
Amortization
of intangible assets
|
19.0
|
|
|
4.0
|
|
|
5.5
|
|
|
—
|
|
|
0.3
|
|
|
3.5
|
|
|
10.9
|
|
|
|
|
43.2
|
|
Intangible
and tangible asset impairment charges
|
3.0
|
|
|
—
|
|
|
189.0
|
|
|
—
|
|
|
—
|
|
|
103.0
|
|
|
124.0
|
|
|
|
|
419.0
|
|
Write-downs,
reserves, and project opening costs, net of recoveries
|
13.2
|
|
|
3.9
|
|
|
25.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9.6)
|
|
|
|
|
32.6
|
|
Acquisition
and integration costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.1
|
|
|
|
|
1.1
|
|
(Income)/loss
on interests in non-consolidated affiliates
|
(0.6)
|
|
|
—
|
|
|
(0.2)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.7)
|
|
|
|
|
(1.5)
|
|
Corporate
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51.8
|
|
|
|
|
51.8
|
|
EBITDA
attributable to Harrah's St. Louis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
4.6
|
|
|
4.6
|
|
Property
EBITDA
|
$
|
163.9
|
|
|
$
|
99.8
|
|
|
$
|
56.2
|
|
|
$
|
46.3
|
|
|
$
|
59.7
|
|
|
$
|
38.5
|
|
|
$
|
43.2
|
|
|
$
|
4.6
|
|
|
$
|
512.2
|
|
CAESARS
ENTERTAINMENT CORPORATION
|
SUPPLEMENTAL
INFORMATION
|
RECONCILIATION
OF NET LOSS ATTRIBUTABLE TO CAESARS ENTERTAINMENT CORPORATION
|
TO
PROPERTY EBITDA
|
(UNAUDITED)
|
|
|
|
Quarter
Ended September 30, 2011
|
(In
millions)
|
Las
Vegas
Region
|
|
Atlantic
City
Region
|
|
Louisiana/
Mississippi
Region
|
|
Iowa/
Missouri
Region
|
|
Illinois/
Indiana
Region
|
|
Other
Nevada
Region
|
|
Managed,
Int'l
and Other
|
|
Discontinued
Operations
|
|
Total
|
Net
loss attributable to Caesars
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(164.0)
|
|
Net
loss attributable to non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(9.4)
|
|
Net
loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(173.4)
|
|
Income
from discontinued operations, net of income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(11.2)
|
|
Net
loss from continuing operations, net of income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(184.6)
|
|
Benefit
for income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(77.7)
|
|
Loss
from continuing operations before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(262.3)
|
|
Other
income, including interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8.2)
|
|
Gains
on early extinguishments of debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
Interest
expense, net of interest capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
450.3
|
|
Income/(loss)
from operations
|
$
|
88.2
|
|
|
$
|
39.7
|
|
|
$
|
35.4
|
|
|
$
|
27.5
|
|
|
$
|
30.5
|
|
|
$
|
30.3
|
|
|
$
|
(71.8)
|
|
|
|
|
179.8
|
|
Depreciation
and amortization
|
63.9
|
|
|
43.0
|
|
|
18.1
|
|
|
7.7
|
|
|
19.3
|
|
|
7.0
|
|
|
17.8
|
|
|
|
|
176.8
|
|
Amortization
of intangible assets
|
19.1
|
|
|
3.8
|
|
|
5.5
|
|
|
—
|
|
|
0.3
|
|
|
3.5
|
|
|
7.0
|
|
|
|
|
39.2
|
|
Intangible
and tangible asset impairment charges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27.1
|
|
|
|
|
27.1
|
|
Write-downs,
reserves, and project opening costs, net of recoveries
|
2.3
|
|
|
2.3
|
|
|
1.5
|
|
|
0.3
|
|
|
(0.1)
|
|
|
0.1
|
|
|
6.1
|
|
|
|
|
12.5
|
|
Acquisition
and integration costs
|
(0.1)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.4
|
|
|
|
|
1.3
|
|
Loss/(income)
on interests in non-consolidated affiliates
|
(0.6)
|
|
|
0.7
|
|
|
(0.2)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|
|
|
1.1
|
|
Corporate
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36.5
|
|
|
|
|
36.5
|
|
EBITDA
attributable to Harrah's St. Louis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
22.9
|
|
|
22.9
|
|
Property
EBITDA
|
$
|
172.9
|
|
|
$
|
89.5
|
|
|
$
|
60.3
|
|
|
$
|
35.5
|
|
|
$
|
50.1
|
|
|
$
|
40.9
|
|
|
$
|
25.1
|
|
|
$
|
22.9
|
|
|
$
|
497.2
|
|
CAESARS
ENTERTAINMENT CORPORATION
|
SUPPLEMENTAL
INFORMATION
|
RECONCILIATION
OF NET LOSS ATTRIBUTABLE TO CAESARS ENTERTAINMENT CORPORATION
|
TO
PROPERTY EBITDA
|
(UNAUDITED)
|
|
|
|
Nine
Months Ended September 30, 2012
|
(In
millions)
|
Las
Vegas
Region
|
|
Atlantic
City
Region
|
|
Louisiana/
Mississippi
Region
|
|
Iowa/
Missouri
Region
|
|
Illinois/
Indiana
Region
|
|
Other
Nevada
Region
|
|
Managed,
Int'l and Other
|
|
Discontinued
Operations
|
|
Total
|
Net
loss attributable to Caesars
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(1,027.8)
|
|
Net
income attributable to non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.5
|
|
Net
loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,026.3)
|
|
Income
from discontinued operations, net of income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(28.5)
|
|
Net
loss from continuing operations, net of income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,054.8)
|
|
Benefit
for income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(502.9)
|
|
Loss
from continuing operations before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,557.7)
|
|
Other
income, including interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(19.4)
|
|
Gains
on early extinguishments of debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(79.5)
|
|
Interest
expense, net of interest capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,574.3
|
|
Income/(loss)
from operations
|
$
|
310.4
|
|
|
$
|
82.4
|
|
|
$
|
(271.2)
|
|
|
$
|
94.6
|
|
|
$
|
121.6
|
|
|
$
|
(61.5)
|
|
|
$
|
(358.6)
|
|
|
|
|
(82.3)
|
|
Depreciation
and amortization
|
201.2
|
|
|
134.1
|
|
|
57.1
|
|
|
22.3
|
|
|
56.7
|
|
|
21.4
|
|
|
53.8
|
|
|
|
|
546.6
|
|
Amortization
of intangible assets
|
56.9
|
|
|
12.0
|
|
|
16.5
|
|
|
—
|
|
|
0.8
|
|
|
10.4
|
|
|
33.0
|
|
|
|
|
129.6
|
|
Intangible
and tangible asset impairment charges
|
3.0
|
|
|
—
|
|
|
356.5
|
|
|
—
|
|
|
—
|
|
|
103.0
|
|
|
258.0
|
|
|
|
|
720.5
|
|
Write-downs,
reserves, and project opening costs, net of recoveries
|
20.4
|
|
|
6.2
|
|
|
36.0
|
|
|
—
|
|
|
0.6
|
|
|
0.6
|
|
|
(0.4)
|
|
|
|
|
63.4
|
|
Acquisition
and integration costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.2
|
|
|
|
|
2.2
|
|
(Income)/loss
on interests in non-consolidated affiliates
|
(2.2)
|
|
|
2.2
|
|
|
(0.5)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9.3
|
|
|
|
|
8.8
|
|
Corporate
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
145.2
|
|
|
|
|
145.2
|
|
EBITDA
attributable to Harrah's St. Louis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
53.0
|
|
|
53.0
|
|
Property
EBITDA
|
$
|
589.6
|
|
|
$
|
236.9
|
|
|
$
|
194.5
|
|
|
$
|
116.9
|
|
|
$
|
179.6
|
|
|
$
|
74.0
|
|
|
$
|
142.5
|
|
|
$
|
53.0
|
|
|
$
|
1,587.0
|
|
CAESARS
ENTERTAINMENT CORPORATION
|
SUPPLEMENTAL
INFORMATION
|
RECONCILIATION
OF NET LOSS ATTRIBUTABLE TO CAESARS ENTERTAINMENT CORPORATION
|
TO
PROPERTY EBITDA
|
(UNAUDITED)
|
|
|
Nine
Months Ended September 30, 2011
|
(In
millions)
|
Las
Vegas
Region
|
|
Atlantic
City
Region
|
|
Louisiana/
Mississippi
Region
|
|
Iowa/
Missouri
Region
|
|
Illinois/
Indiana
Region
|
|
Other
Nevada
Region
|
|
Managed,
Int'l and Other
|
|
Discontinued
Operations
|
|
Total
|
Net
loss attributable to Caesars
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(467.0)
|
|
Net
loss attributable to non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4.3)
|
|
Net
loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(471.3)
|
|
Income
from discontinued operations, net of income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(35.2)
|
|
Net
loss from continuing operations, net of income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(506.5)
|
|
Benefit
for income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(271.2)
|
|
Loss
from continuing operations before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(777.7)
|
|
Other
income, including interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(16.7)
|
|
Gains
on early extinguishments of debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(47.9)
|
|
Interest
expense, net of interest capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,448.3
|
|
Income/(loss)
from operations
|
$
|
348.4
|
|
|
$
|
93.6
|
|
|
$
|
106.0
|
|
|
$
|
79.7
|
|
|
$
|
110.2
|
|
|
$
|
48.4
|
|
|
$
|
(180.3)
|
|
|
|
|
606.0
|
|
Depreciation
and amortization
|
178.4
|
|
|
129.0
|
|
|
55.1
|
|
|
23.0
|
|
|
59.0
|
|
|
21.3
|
|
|
52.8
|
|
|
|
|
518.6
|
|
Amortization
of intangible assets
|
57.3
|
|
|
11.3
|
|
|
16.4
|
|
|
—
|
|
|
1.0
|
|
|
10.4
|
|
|
21.3
|
|
|
|
|
117.7
|
|
Intangible
and tangible asset impairment charges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27.1
|
|
|
|
|
27.1
|
|
Write-downs,
reserves, and project opening costs, net of recoveries
|
14.6
|
|
|
4.5
|
|
|
6.6
|
|
|
0.4
|
|
|
2.8
|
|
|
0.3
|
|
|
30.8
|
|
|
|
|
60.0
|
|
Acquisition
and integration costs
|
0.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.4
|
|
|
|
|
3.6
|
|
Loss/(income)
on interests in non-consolidated affiliates
|
0.4
|
|
|
1.8
|
|
|
(0.5)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.5
|
|
|
|
|
4.2
|
|
Corporate
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
115.1
|
|
|
|
|
115.1
|
|
EBITDA
attributable to Harrah's St. Louis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
71.5
|
|
|
71.5
|
|
Property
EBITDA
|
$
|
599.3
|
|
|
$
|
240.3
|
|
|
$
|
183.6
|
|
|
$
|
103.1
|
|
|
$
|
173.0
|
|
|
$
|
80.3
|
|
|
$
|
72.7
|
|
|
$
|
71.5
|
|
|
$
|
1,523.8
|
|
CAESARS
ENTERTAINMENT CORPORATION SUPPLEMENTAL INFORMATION
|
RECONCILIATION
OF NET LOSS ATTRIBUTABLE TO CAESARS ENTERTAINMENT CORPORATION TO
ADJUSTED EBITDA AND LTM ADJUSTED EBITDA-PRO FORMA
|
(UNAUDITED)
|
|
Adjusted
EBITDA is defined as earnings before interest expense, income taxes,
and depreciation and amortization ("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.
|
|
Last
twelve months ("LTM") Adjusted EBITDA-Pro Forma is defined as Adjusted
EBITDA further adjusted to include pro forma adjustments related to
properties and estimated cost savings yet-to-be-realized.
|
|
Adjusted
EBITDA and LTM Adjusted EBITDA-Pro Forma are presented as supplemental
measures of the Company's performance and management believes that
Adjusted EBITDA and LTM Adjusted EBITDA-Pro Forma provide investors
with additional information and allow 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 and LTM Adjusted EBITDA-Pro Forma may not be comparable
to other similarly titled measures of other companies.
|
|
The
following table reconciles net loss attributable to Caesars to Adjusted
EBITDA for the quarters ended September 30, 2012 and 2011:
|
(In
millions)
|
Quarter
Ended September 30, 2012
|
|
Quarter
Ended September 30, 2011
|
Net
loss attributable to Caesars
|
$
|
(505.5)
|
|
|
$
|
(164.0)
|
|
Interest
expense, net of interest capitalized and interest income
|
512.3
|
|
|
443.2
|
|
Benefit
for income taxes (a)
|
(223.7)
|
|
|
(70.5)
|
|
Depreciation
and amortization (b)
|
228.2
|
|
|
223.6
|
|
EBITDA
|
11.3
|
|
|
432.3
|
|
Project
opening costs, abandoned projects and development costs (c)
|
31.0
|
|
|
4.2
|
|
Acquisition
and integration costs (d)
|
1.1
|
|
|
1.3
|
|
Gains
on early extinguishments of debt (e)
|
—
|
|
|
—
|
|
Net
(loss)/income attributable to non-controlling interests, net of
(distributions) (f)
|
(0.6)
|
|
|
(12.2)
|
|
Impairments
of intangible and tangible assets (g)
|
419.0
|
|
|
27.1
|
|
Non-cash
expense for stock compensation benefits (h)
|
9.9
|
|
|
7.3
|
|
Adjustments
for recoveries from insurance claims for flood losses(i)
|
—
|
|
|
—
|
|
Other
items(j)
|
12.8
|
|
|
22.5
|
|
Adjusted EBITDA
|
$
|
484.5
|
|
|
$
|
482.5
|
|
The following table reconciles net loss
attributable to Caesars to Adjusted EBITDA for the nine months ended
September 30, 2012 and 2011 and for the year ended December 31, 2011,
and reconciles net loss attributable to Caesars to LTM Adjusted
EBITDA-Pro Forma for the last twelve months ended September 30, 2012.
|
(1)
|
|
(2)
|
|
(3)
|
|
|
(In
millions)
|
Nine
Months Ended Sept. 30, 2012
|
|
Nine
Months Ended Sept. 30, 2011
|
|
Year
Ended December 31, 2011
|
|
(1)-(2)+(3)
LTM
|
Net
loss attributable to Caesars
|
$
|
(1,027.8)
|
|
|
$
|
(467.0)
|
|
|
$
|
(687.6)
|
|
|
$
|
(1,248.4)
|
|
Interest
expense, net of interest capitalized and interest income
|
1,557.4
|
|
|
1,432.4
|
|
|
2,097.8
|
|
|
2,222.8
|
|
Benefit
for income taxes (a)
|
(484.9)
|
|
|
(248.5)
|
|
|
(506.9)
|
|
|
(743.3)
|
|
Depreciation
and amortization (b)
|
692.0
|
|
|
658.9
|
|
|
881.3
|
|
|
914.4
|
|
EBITDA
|
736.7
|
|
|
1,375.8
|
|
|
1,784.6
|
|
|
1,145.5
|
|
Project
opening costs, abandoned projects and development costs (c)
|
47.4
|
|
|
8.1
|
|
|
37.0
|
|
|
76.3
|
|
Acquisition
and integration costs (d)
|
2.2
|
|
|
3.6
|
|
|
4.3
|
|
|
2.9
|
|
Gains
on early extinguishments of debt (e)
|
(79.5)
|
|
|
(47.9)
|
|
|
(47.9)
|
|
|
(79.5)
|
|
Net
(loss)/income attributable to non-controlling interests, net of
(distributions) (f)
|
(4.1)
|
|
|
(11.0)
|
|
|
11.1
|
|
|
18.0
|
|
Impairments
of intangible and tangible assets (g)
|
720.5
|
|
|
27.1
|
|
|
11.0
|
|
|
704.4
|
|
Non-cash
expense for stock compensation benefits (h)
|
43.0
|
|
|
17.6
|
|
|
22.2
|
|
|
47.6
|
|
Adjustments for recoveries from insurance claims for flood losses(i)
|
(6.6)
|
|
|
14.0
|
|
|
6.6
|
|
|
(14.0)
|
|
Other
items(j)
|
58.0
|
|
|
90.3
|
|
|
114.7
|
|
|
82.4
|
|
Adjusted
EBITDA
|
$
|
1,517.6
|
|
|
$
|
1,477.6
|
|
|
$
|
1,943.6
|
|
|
1,983.6
|
|
Pro
forma adjustment for estimated cost savings yet-to-be-realized (k)
|
|
|
|
|
|
|
204.3
|
|
Pro
forma adjustments for discontinued operations (l)
|
|
|
|
|
|
|
(73.5)
|
|
LTM
Adjusted EBITDA-Pro Forma
|
|
|
|
|
|
|
$
|
2,114.4
|
|
|
|
|
|
|
|
|
|
|
|
(a)
Amounts include the provision for income taxes
related to discontinued operations of $1.8 million and $7.2 million for
the third quarter of 2012 and 2011, respectively, and the provision for
income taxes related to discontinued operations of $18.0 million, $22.7
million, and $29.5 million for the nine months ended September 30, 2012
and 2011, and for the year ended December 31, 2011, respectively.
|
|
(b)
Amounts include depreciation and amortization related
to discontinued operations of $0.0 million and $4.5 million for the
third quarter of 2012 and 2011, respectively, and depreciation and
amortization related to discontinued operations of $6.5 million, $13.6
million, and $18.2 million for the nine months ended September 30, 2012
and 2011, and for the year ended December 31, 2011, respectively.
|
|
(c)
Amounts represent pre-opening costs incurred in
connection with new property openings and expansion projects at
existing properties, as well as any non-cash write-offs of abandoned
development projects.
|
|
(d)
Amounts include certain one-time costs associated
with development activities in Ohio, Massachusetts, and other markets
which are infrequently occurring costs and associated with acquisition
initiatives.
|
|
(e)
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.
|
|
(f)
Amounts represent minority owners' share of
income/(loss) from the Company's majority-owned consolidated
subsidiaries, net of cash distributions to minority owners, which is a
non-cash item as it excludes any cash distributions.
|
|
(g)
Amounts represent non-cash charges to impair
intangible and tangible assets primarily resulting from changes in the
business outlook in light of economic conditions.
|
|
(h)
Amounts represent non-cash stock-based compensation
expense related to stock options granted to the Company's employees.
|
|
(i)
Amounts represent adjustments for insurance claims
related to lost profits during the floods that occurred in 2011.
|
|
(j)
Amounts represent add-backs and deductions from
EBITDA, whether permitted and/or required under the indentures
governing CEOC's existing notes and the credit agreement governing
CEOC's senior secured credit facilities, included in arriving at LTM
Adjusted EBITDA-Pro Forma but not separately identified. Such add-backs
and deductions may include litigation awards and settlements, severance
and relocation costs, permit remediation costs, gains and losses from
disposals of assets, costs incurred in connection with implementing the
Company's efficiency and cost-saving programs, the Company's insurance
policy deductibles incurred as a result of catastrophic events such as
floods and hurricanes, and non-cash equity in earnings of
non-consolidated affiliates (net of distributions).
|
|
(k)
Amount represents adjustments to reflect the impact
of annualized run-rate cost savings and anticipated future cost savings
to be realized from the Company's announced Project Renewal and other
profitability improvement programs.
|
|
(l)
Per CEOC's senior secured credit facilities, EBITDA
related to the discontinued operations of Harrah's St. Louis is
deducted from LTM Adjusted EBITDA - Pro Forma.
|
The following tables present the
Consolidated Summary of Operations and Supplemental Information for
Caesars Entertainment Operating Company, Inc. ("CEOC"), a wholly owned
subsidiary of Caesars Entertainment Corporation for the periods
indicated.
CAESARS
ENTERTAINMENT OPERATING COMPANY, INC.
|
CONSOLIDATED
SUMMARY OF OPERATIONS
|
(UNAUDITED)
|
|
|
|
|
|
Quarter
Ended September 30,
|
|
Nine
Months Ended September 30,
|
(In
millions)
|
2012
|
|
2011
|
|
2012
|
|
2011
|
Net
revenues
|
$
|
1,640.3
|
|
|
$
|
1,669.2
|
|
|
$
|
4,928.9
|
|
|
$
|
4,964.7
|
|
Property
operating expenses
|
(1,260.9)
|
|
|
(1,303.6)
|
|
|
(3,754.1)
|
|
|
(3,823.7)
|
|
Depreciation
and amortization
|
(142.1)
|
|
|
(135.3)
|
|
|
(427.9)
|
|
|
(400.4)
|
|
Write-downs,
reserves, and project opening costs, net of recoveries
|
(30.2)
|
|
|
(15.2)
|
|
|
(56.8)
|
|
|
(58.5)
|
|
Intangible
and tangible asset impairment charges
|
(416.0)
|
|
|
(27.1)
|
|
|
(717.5)
|
|
|
(27.1)
|
|
Income/(loss)
on interests in non-consolidated affiliates
|
0.9
|
|
|
(1.4)
|
|
|
(9.9)
|
|
|
(2.9)
|
|
Corporate
expense
|
(43.1)
|
|
|
(27.3)
|
|
|
(120.0)
|
|
|
(91.0)
|
|
Acquisition
and integration costs
|
(1.0)
|
|
|
(1.1)
|
|
|
(1.9)
|
|
|
(2.9)
|
|
Amortization
of intangible assets
|
(27.2)
|
|
|
(24.3)
|
|
|
(78.4)
|
|
|
(72.9)
|
|
(Loss)/income
from operations
|
(279.3)
|
|
|
133.9
|
|
|
(237.6)
|
|
|
485.3
|
|
Interest
expense, net of interest capitalized
|
(495.6)
|
|
|
(427.0)
|
|
|
(1,509.7)
|
|
|
(1,381.7)
|
|
Other
income, including interest income
|
4.0
|
|
|
7.6
|
|
|
18.4
|
|
|
15.9
|
|
Loss
from continuing operations before income taxes
|
(770.9)
|
|
|
(285.5)
|
|
|
(1,728.9)
|
|
|
(880.5)
|
|
Benefit
for income taxes
|
237.5
|
|
|
85.3
|
|
|
563.2
|
|
|
308.8
|
|
Loss
from continuing operations, net of income taxes
|
(533.4)
|
|
|
(200.2)
|
|
|
(1,165.7)
|
|
|
(571.7)
|
|
Discontinued
operations
|
|
|
|
|
|
|
|
Income
from discontinued operations
|
4.6
|
|
|
18.4
|
|
|
46.5
|
|
|
57.9
|
|
Provision
for income taxes
|
(1.8)
|
|
|
(7.2)
|
|
|
(18.0)
|
|
|
(22.7)
|
|
Income
from discontinued operations, net of income taxes
|
2.8
|
|
|
11.2
|
|
|
28.5
|
|
|
35.2
|
|
Net
loss
|
(530.6)
|
|
|
(189.0)
|
|
|
(1,137.2)
|
|
|
(536.5)
|
|
Less:
net (income)/loss attributable to non-controlling interests
|
(0.7)
|
|
|
9.2
|
|
|
(1.7)
|
|
|
4.0
|
|
Net
loss attributable to CEOC
|
$
|
(531.3)
|
|
|
$
|
(179.8)
|
|
|
$
|
(1,138.9)
|
|
|
$
|
(532.5)
|
|
CAESARS
ENTERTAINMENT OPERATING COMPANY, INC.
|
SUPPLEMENTAL
INFORMATION
|
RECONCILIATION
OF NET LOSS ATTRIBUTABLE TO CAESARS ENTERTAINMENT
|
OPERATING
COMPANY, INC. TO PROPERTY EBITDA
|
(UNAUDITED)
|
|
Property
EBITDA is presented as a supplemental measure of CEOC'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 CEOC's ongoing operating performance at an operating
property level. In evaluating Property EBITDA you should be aware that
in the future, CEOC 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 CEOC's
future results will be unaffected by unusual or unexpected items.
|
|
Property
EBITDA is a non-GAAP financial measure commonly used in the Company's
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 presented 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.
|
|
The
following tables reconcile net loss attributable to CEOC to Property
EBITDA for the periods indicated.
|
|
|
Quarter
Ended September 30, 2012
|
(In
millions)
|
Las
Vegas
Region
|
|
Atlantic
City
Region
|
|
Louisiana/
Mississippi
Region
|
|
Iowa/
Missouri
Region
|
|
Illinois/
Indiana
Region
|
|
Other
Nevada
Region
|
|
Managed,
Int'l
and Other
|
|
Discontinued
Operations
|
|
Total
|
Net
loss attributable to CEOC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(531.3)
|
|
Net
income attributable to non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.7
|
|
Net
loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(530.6)
|
|
Income
from discontinued operations, net of income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2.8)
|
|
Net
loss from continuing operations, net of income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(533.4)
|
|
Benefit
for income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(237.5)
|
|
Loss
from continuing operations before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(770.9)
|
|
Other
income, including interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4.0)
|
|
Interest
expense, net of interest capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
495.6
|
|
Income/(loss)
from operations
|
$
|
14.8
|
|
|
$
|
27.5
|
|
|
$
|
(183.0)
|
|
|
$
|
38.8
|
|
|
$
|
40.5
|
|
|
$
|
(81.2)
|
|
|
$
|
(136.7)
|
|
|
|
|
(279.3)
|
|
Depreciation
and amortization
|
41.2
|
|
|
32.8
|
|
|
19.7
|
|
|
7.5
|
|
|
19.0
|
|
|
5.4
|
|
|
16.5
|
|
|
|
|
142.1
|
|
Amortization
of intangible assets
|
8.2
|
|
|
3.0
|
|
|
5.5
|
|
|
—
|
|
|
0.3
|
|
|
0.5
|
|
|
9.7
|
|
|
|
|
27.2
|
|
Intangible
and tangible asset impairment charges
|
—
|
|
|
—
|
|
|
189.0
|
|
|
—
|
|
|
—
|
|
|
103.0
|
|
|
124.0
|
|
|
|
|
416.0
|
|
Write-downs,
reserves, and project opening costs, net of recoveries
|
11.0
|
|
|
3.7
|
|
|
25.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9.6)
|
|
|
|
|
30.2
|
|
Acquisition
and integration costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.0
|
|
|
|
|
1.0
|
|
Loss/(income)
on interests in non-consolidated affiliates
|
—
|
|
|
—
|
|
|
(0.2)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.7)
|
|
|
|
|
(0.9)
|
|
Corporate
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43.1
|
|
|
|
|
43.1
|
|
EBITDA
attributable to Harrah's St. Louis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
4.6
|
|
|
4.6
|
|
Property
EBITDA
|
$
|
75.2
|
|
|
$
|
66.9
|
|
|
$
|
56.2
|
|
|
$
|
46.3
|
|
|
$
|
59.7
|
|
|
$
|
27.8
|
|
|
$
|
47.3
|
|
|
$
|
4.6
|
|
|
$
|
384.0
|
|
CAESARS
ENTERTAINMENT OPERATING COMPANY, INC.
|
SUPPLEMENTAL
INFORMATION
|
RECONCILIATION
OF NET LOSS ATTRIBUTABLE TO CAESARS ENTERTAINMENT
|
OPERATING
COMPANY, INC. TO PROPERTY EBITDA
|
(UNAUDITED)
|
|
|
|
Quarter
Ended September 30, 2011
|
(In
millions)
|
Las
Vegas
Region
|
|
Atlantic
City
Region
|
|
Louisiana/
Mississippi
Region
|
|
Iowa/
Missouri
Region
|
|
Illinois/
Indiana
Region
|
|
Other
Nevada
Region
|
|
Managed,
Int'l
and Other
|
|
Discontinued
Operations
|
|
Total
|
Net
loss attributable to CEOC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(179.8)
|
|
Net
loss attributable to non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(9.2)
|
|
Net
loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(189.0)
|
|
Income
from discontinued operations, net of income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(11.2)
|
|
Net
loss from continuing operations, net of income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(200.2)
|
|
Benefit
for income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(85.3)
|
|
Loss
from continuing operations before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(285.5)
|
|
Other
income, including interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7.6)
|
|
Interest
expense, net of interest capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
427.0
|
|
Income/(loss)
from operations
|
$
|
39.9
|
|
|
$
|
27.5
|
|
|
$
|
35.4
|
|
|
$
|
27.5
|
|
|
$
|
30.5
|
|
|
$
|
24.5
|
|
|
$
|
(51.4)
|
|
|
|
|
133.9
|
|
Depreciation
and amortization
|
36.4
|
|
|
30.8
|
|
|
18.1
|
|
|
7.7
|
|
|
19.3
|
|
|
5.3
|
|
|
17.7
|
|
|
|
|
135.3
|
|
Amortization
of intangible assets
|
8.2
|
|
|
2.7
|
|
|
5.5
|
|
|
—
|
|
|
0.3
|
|
|
0.5
|
|
|
7.1
|
|
|
|
|
24.3
|
|
Intangible
and tangible asset impairment charges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27.1
|
|
|
|
|
27.1
|
|
Write-downs,
reserves, and project opening costs, net of recoveries
|
1.0
|
|
|
1.7
|
|
|
1.5
|
|
|
0.3
|
|
|
(0.1)
|
|
|
0.1
|
|
|
10.7
|
|
|
|
|
15.2
|
|
Acquisition
and integration costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.1
|
|
|
|
|
1.1
|
|
Loss/(income)
on interests in non-consolidated affiliates
|
—
|
|
|
0.4
|
|
|
(0.2)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|
|
|
1.4
|
|
Corporate
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27.3
|
|
|
|
|
27.3
|
|
EBITDA
attributable to Harrah's St. Louis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
22.9
|
|
|
22.9
|
|
Property
EBITDA
|
$
|
85.5
|
|
|
$
|
63.1
|
|
|
$
|
60.3
|
|
|
$
|
35.5
|
|
|
$
|
50.1
|
|
|
$
|
30.4
|
|
|
$
|
40.7
|
|
|
$
|
22.9
|
|
|
$
|
388.5
|
|
CAESARS
ENTERTAINMENT OPERATING COMPANY, INC.
|
SUPPLEMENTAL
INFORMATION
|
RECONCILIATION
OF NET LOSS ATTRIBUTABLE TO CAESARS ENTERTAINMENT
|
OPERATING
COMPANY, INC. TO PROPERTY EBITDA
|
(UNAUDITED)
|
|
|
|
Nine
Months Ended September 30, 2012
|
(In
millions)
|
Las
Vegas
Region
|
|
Atlantic
City
Region
|
|
Louisiana/
Mississippi
Region
|
|
Iowa/
Missouri
Region
|
|
Illinois/
Indiana
Region
|
|
Other
Nevada
Region
|
|
Managed,
Int'l
and Other
|
|
Discontinued
Operations
|
|
Total
|
Net
loss attributable to CEOC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(1,138.9)
|
|
Net
income attributable to non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.7
|
|
Net
loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,137.2)
|
|
Income
from discontinued operations, net of income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(28.5)
|
|
Net
loss from continuing operations, net of income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,165.7)
|
|
Benefit
for income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(563.2)
|
|
Loss
from continuing operations before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,728.9)
|
|
Other
income, including interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(18.4)
|
|
Interest
expense, net of interest capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,509.7
|
|
Income/(loss)
from operations
|
$
|
143.7
|
|
|
$
|
46.0
|
|
|
$
|
(271.2)
|
|
|
$
|
94.6
|
|
|
$
|
121.6
|
|
|
$
|
(80.7)
|
|
|
$
|
(291.6)
|
|
|
|
|
(237.6)
|
|
Depreciation
and amortization
|
125.7
|
|
|
96.7
|
|
|
57.1
|
|
|
22.3
|
|
|
56.7
|
|
|
16.2
|
|
|
53.2
|
|
|
|
|
427.9
|
|
Amortization
of intangible assets
|
24.5
|
|
|
8.9
|
|
|
16.5
|
|
|
—
|
|
|
0.8
|
|
|
1.6
|
|
|
26.1
|
|
|
|
|
78.4
|
|
Intangible
and tangible asset impairment charges
|
—
|
|
|
—
|
|
|
356.5
|
|
|
—
|
|
|
—
|
|
|
103.0
|
|
|
258.0
|
|
|
|
|
717.5
|
|
Write-downs,
reserves, and project opening costs, net of recoveries
|
14.3
|
|
|
5.7
|
|
|
36.0
|
|
|
—
|
|
|
0.6
|
|
|
0.6
|
|
|
(0.4)
|
|
|
|
|
56.8
|
|
Acquisition
and integration costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.9
|
|
|
|
|
1.9
|
|
Loss/(income)
on interests in non-consolidated affiliates
|
—
|
|
|
1.1
|
|
|
(0.5)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9.3
|
|
|
|
|
9.9
|
|
Corporate
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
120.0
|
|
|
|
|
120.0
|
|
EBITDA
attributable to Harrah's St. Louis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
53.0
|
|
|
53.0
|
|
Property
EBITDA
|
$
|
308.2
|
|
|
$
|
158.3
|
|
|
$
|
194.5
|
|
|
$
|
116.9
|
|
|
$
|
179.6
|
|
|
$
|
40.7
|
|
|
$
|
176.6
|
|
|
$
|
53.0
|
|
|
$
|
1,227.8
|
|
CAESARS
ENTERTAINMENT OPERATING COMPANY, INC.
|
SUPPLEMENTAL
INFORMATION
|
RECONCILIATION
OF NET LOSS ATTRIBUTABLE TO CAESARS ENTERTAINMENT
|
OPERATING
COMPANY, INC. TO PROPERTY EBITDA
|
(UNAUDITED)
|
|
|
|
Nine
Months Ended September 30, 2011
|
(In
millions)
|
Las
Vegas
Region
|
|
Atlantic
City
Region
|
|
Louisiana/
Mississippi
Region
|
|
Iowa/
Missouri
Region
|
|
Illinois/
Indiana
Region
|
|
Other
Nevada
Region
|
|
Managed,
Int'l
and Other
|
|
Discontinued
Operations
|
|
Total
|
Net
loss attributable to CEOC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(532.5)
|
|
Net
loss attributable to non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4.0)
|
|
Net
loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(536.5)
|
|
Income
from discontinued operations, net of income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(35.2)
|
|
Net
loss from continuing operations, net of income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(571.7)
|
|
Benefit
for income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(308.8)
|
|
Loss
from continuing operations before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(880.5)
|
|
Other
income, including interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(15.9)
|
|
Interest
expense, net of interest capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,381.7
|
|
Income/(loss)
from operations
|
$
|
182.1
|
|
|
$
|
60.4
|
|
|
$
|
106.0
|
|
|
$
|
79.7
|
|
|
$
|
110.2
|
|
|
$
|
31.9
|
|
|
$
|
(85.0)
|
|
|
|
|
485.3
|
|
Depreciation
and amortization
|
102.8
|
|
|
91.5
|
|
|
55.1
|
|
|
23.0
|
|
|
59.0
|
|
|
16.1
|
|
|
52.9
|
|
|
|
|
400.4
|
|
Amortization
of intangible assets
|
24.5
|
|
|
8.2
|
|
|
16.4
|
|
|
—
|
|
|
1.0
|
|
|
1.6
|
|
|
21.2
|
|
|
|
|
72.9
|
|
Intangible
and tangible asset impairment charges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27.1
|
|
|
|
|
27.1
|
|
Write-downs,
reserves, and project opening costs, net of recoveries
|
9.5
|
|
|
3.5
|
|
|
6.6
|
|
|
0.4
|
|
|
2.8
|
|
|
0.3
|
|
|
35.4
|
|
|
|
|
58.5
|
|
Acquisition
and integration costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.9
|
|
|
|
|
2.9
|
|
Loss/(income)
on interests in non-consolidated affiliates
|
—
|
|
|
0.9
|
|
|
(0.5)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.5
|
|
|
|
|
2.9
|
|
Corporate
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
91.0
|
|
|
|
|
91.0
|
|
EBITDA
attributable to Harrah's St. Louis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
71.5
|
|
|
71.5
|
|
Property
EBITDA
|
$
|
318.8
|
|
|
$
|
164.6
|
|
|
$
|
183.6
|
|
|
$
|
103.1
|
|
|
$
|
173.0
|
|
|
$
|
49.9
|
|
|
$
|
148.0
|
|
|
$
|
71.5
|
|
|
$
|
1,212.5
|
|
CAESARS
ENTERTAINMENT OPERATING COMPANY, INC.
|
SUPPLEMENTAL
INFORMATION
|
RECONCILIATION
OF NET LOSS ATTRIBUTABLE TO CAESARS ENTERTAINMENT
|
OPERATING
COMPANY, INC.
|
TO
ADJUSTED EBITDA, LTM ADJUSTED EBITDA-PRO FORMA AND
|
LTM
ADJUSTED EBITDA-PRO FORMA - CEOC RESTRICTED
|
(UNAUDITED)
|
|
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 the credit facility.
|
LTM
Adjusted EBITDA-Pro Forma is defined as Adjusted EBITDA further
adjusted to include pro forma adjustments related to properties and
estimated cost savings yet-to-be-realized.
|
|
Adjusted
EBITDA and LTM Adjusted EBITDA-Pro Forma are presented as supplemental
measures of CEOC's performance and management believes that Adjusted
EBITDA and LTM Adjusted EBITDA-Pro Forma provide investors with
additional information and allow a better understanding of the results
of operational activities separate from the financial impact of
decisions made for the long-term benefit of CEOC.
|
|
Adjusted
EBITDA and LTM Adjusted EBITDA-Pro Forma 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. The reconciliation of net loss attributable to CEOC to
LTM Adjusted EBITDA-Pro Forma on the following page includes an
additional calculation to exclude the results and adjustments of the
unrestricted subsidiaries of CEOC resulting in an amount used to
determine compliance with debt covenants ("LTM Adjusted EBITDA-Pro
Forma - CEOC Restricted").
|
|
Because
not all companies use identical calculations, the presentation of
CEOC's Adjusted EBITDA, LTM Adjusted EBITDA-Pro Forma, and LTM Adjusted
EBITDA-Pro Forma - CEOC Restricted may not be comparable to other
similarly titled measures of other companies.
|
|
The
following table reconciles net loss attributable to CEOC to Adjusted
EBITDA for the quarters ended June 30, 2012 and 2011.
|
(In
millions)
|
Quarter
Ended September 30, 2012
|
|
Quarter
Ended September 30, 2011
|
Net
loss attributable to CEOC
|
$
|
(531.3)
|
|
|
$
|
(179.8)
|
|
Interest
expense, net of capitalized interest and interest income
|
492.4
|
|
|
420.1
|
|
Benefit
for income taxes (a)
|
(235.7)
|
|
|
(78.1)
|
|
Depreciation
and amortization (b)
|
172.4
|
|
|
167.2
|
|
EBITDA
|
(102.2)
|
|
|
329.4
|
|
Project
opening costs, abandoned projects and development costs (c)
|
31.1
|
|
|
3.6
|
|
Acquisition
and integration costs (d)
|
1.0
|
|
|
1.1
|
|
Net
income attributable to non-controlling interests, net of
(distributions) (e)
|
(2.1)
|
|
|
(12.0)
|
|
Impairments
of intangible and tangible assets (f)
|
416.0
|
|
|
27.1
|
|
Non-cash
expense for stock compensation benefits (g)
|
7.5
|
|
|
7.0
|
|
Adjustments for recoveries from insurance claims for flood losses(h)
|
—
|
|
|
—
|
|
Other
items (i)
|
—
|
|
|
16.1
|
|
Adjusted EBITDA
|
$
|
351.3
|
|
|
$
|
372.3
|
|
The following table reconciles net loss
attributable to CEOC to Adjusted EBITDA for the six months ended
September 30, 2012 and 2011 and for the year ended December 31, 2011,
and reconciles net loss attributable to CEOC to LTM Adjusted EBITDA-Pro
Forma, and LTM Adjusted EBITDA-Pro Forma - CEOC Restricted for the last
twelve months ended September 30, 2012.
|
(1)
|
|
(2)
|
|
(3)
|
|
|
(In
millions)
|
Nine
Months Ended Sept. 30, 2012
|
|
Nine
Months Ended Sept. 30, 2011
|
|
Year
Ended December 31, 2011
|
|
(1)-(2)+(3)
LTM
|
Net
loss attributable to CEOC
|
$
|
(1,138.9)
|
|
|
$
|
(532.5)
|
|
|
$
|
(779.4)
|
|
|
$
|
(1,385.8)
|
|
Interest
expense, net of capitalized interest and interest income
|
1,493.7
|
|
|
1,366.5
|
|
|
2,007.5
|
|
|
2,134.7
|
|
Benefit
for income taxes (a)
|
(545.2)
|
|
|
(286.1)
|
|
|
(533.5)
|
|
|
(792.6)
|
|
Depreciation
and amortization (b)
|
522.1
|
|
|
495.9
|
|
|
665.3
|
|
|
691.5
|
|
EBITDA
|
331.7
|
|
|
1,043.8
|
|
|
1,359.9
|
|
|
647.8
|
|
Project
opening costs, abandoned projects and development costs (c)
|
47.5
|
|
|
7.5
|
|
|
36.4
|
|
|
76.4
|
|
Acquisition
and integration costs (d)
|
1.9
|
|
|
2.9
|
|
|
3.5
|
|
|
2.5
|
|
Net
income attributable to non-controlling interests, net of
(distributions) (e)
|
(3.9)
|
|
|
(10.7)
|
|
|
0.6
|
|
|
7.4
|
|
Impairments
of intangible and tangible assets (f)
|
717.5
|
|
|
27.1
|
|
|
11.0
|
|
|
701.4
|
|
Non-cash
expense for stock compensation benefits (g)
|
23.9
|
|
|
16.9
|
|
|
21.3
|
|
|
28.3
|
|
Adjustments for recoveries from insurance claims for
flood
losses(h)
|
(6.6)
|
|
|
14.0
|
|
|
6.6
|
|
|
(14.0)
|
|
Other
items (i)
|
24.8
|
|
|
61.0
|
|
|
74.5
|
|
|
38.3
|
|
Adjusted
EBITDA
|
$
|
1,136.8
|
|
|
$
|
1,162.5
|
|
|
$
|
1,513.8
|
|
|
1,488.1
|
|
Pro
forma adjustment for estimated cost savings yet-to-be-realized (j)
|
|
|
|
|
|
|
146.4
|
|
Pro
forma adjustments for discontinued operations (k)
|
|
|
|
|
|
|
(73.5)
|
|
LTM
Adjusted EBITDA-Pro Forma
|
|
|
|
|
|
|
1,561.0
|
|
EBITDA
of CEOC's unrestricted subsidiaries
|
|
|
|
|
|
|
(79.6)
|
|
Adjustments
related to CEOC's unrestricted subsidiaries
|
|
|
|
|
|
|
(4.0)
|
|
Pro
forma adjustments related to CEOC's unrestricted subsidiaries
|
|
|
|
|
|
|
(6.4)
|
|
LTM
Adjusted EBITDA-Pro Forma - CEOC Restricted
|
|
|
|
|
|
|
$
|
1,471.0
|
|
|
(a)
Amounts include the provision for income taxes
related to discontinued operations of $1.8 million and $7.2 million for
the third quarter of 2012 and 2011, respectively, and the provision for
income taxes related to discontinued operations of $18.0 million, $22.7
million, and $29.5 million for the nine months ended September 30, 2012
and 2011, and for the year ended December 31, 2011, respectively.
|
(b)
Amounts include depreciation and amortization related
to discontinued operations of $0.0 million and $4.5 million for the
third quarter of 2012 and 2011, respectively, and depreciation and
amortization related to discontinued operations of $6.5 million, $13.6
million, and $18.2 million for the nine months ended September 30, 2012
and 2011, and for the year ended December 31, 2011, respectively.
|
(c)
Amounts represent pre-opening costs incurred in
connection with new property openings and expansion projects at
existing properties, as well as any non-cash write-offs of abandoned
development projects.
|
(d)
Amounts include certain one-time costs associated
with development activities in Ohio, Massachusetts, and other markets
which are infrequently occurring costs and associated with acquisition
initiatives.
|
(e)
Amounts represent minority owners' share of
income/(loss) from CEOC's majority-owned consolidated subsidiaries, net
of cash distributions to minority owners, which is a non-cash item as
it excludes any cash distributions.
|
(f)
Amounts represent non-cash charges to impair intangible and tangible
assets primarily resulting from changes in the business outlook in
light of economic conditions.
|
(g)
Amounts represent non-cash stock-based compensation
expense related to stock options granted to CEOC's employees.
|
(h)
Amounts represent adjustments for insurance claims
related to lost profits during the floods that occurred in 2011.
|
(i)
Amounts represent add-backs and deductions from
EBITDA, whether permitted and/or required under the indentures
governing CEOC's existing notes and the credit agreement governing
CEOC's senior secured credit facilities, included in arriving at LTM
Adjusted EBITDA-Pro Forma - CEOC Restricted but not separately
identified. Such add-backs and deductions may include litigation awards
and settlements, severance and relocation costs, permit remediation
costs, gains and losses from disposals of assets, costs incurred in
connection with implementing the Company's efficiency and cost-saving
programs, CEOC's insurance policy deductibles incurred as a result of
catastrophic events such as floods and hurricanes, and non-cash equity
in earnings of non-consolidated affiliates (net of distributions).
|
(j
Amount represents adjustments of CEOC to reflect the impact of
annualized run-rate cost savings and anticipated future cost savings to
be realized from the Company's announced Project Renewal and other
profitability improvement programs.
|
(k)
Per CEOC's senior secured credit facilities, EBITDA related to the
discontinued operations of Harrah's St. Louis is deducted from LTM
Adjusted EBITDA - Pro Forma.
|
|