LAS VEGAS,
May 1, 2013- Caesars Entertainment
Corporation (NASDAQ: CZR) today reported the following first-quarter
2013 results:
Financial Highlights
- Decline in first-quarter 2013 revenues from strong 2012
first quarter due to reduced visitation
- Caesars Growth Partners announced to strengthen balance
sheet, fund growth projects
- Nobu Hotel at Caesars Palace and Horseshoe Cincinnati
open to large crowds
The table below highlights certain GAAP
and non-GAAP financial measures:
|
Quarter
Ended March 31,
|
|
Percent
Favorable/
(Unfavorable)
|
(Dollars
in millions, except per share data)
|
2013
|
|
2012
|
|
Net
revenues
|
$
|
2,143.2
|
|
|
$
|
2,206.1
|
|
|
(2.9)%
|
|
Income
from operations (1)
|
141.8
|
|
|
61.3
|
|
|
131.3%
|
|
Loss
from continuing operations, net of income taxes
|
(175.7)
|
|
|
(288.4)
|
|
|
39.1%
|
|
(Loss)/income
from discontinued operations, net of income taxes
|
(41.0)
|
|
|
7.3
|
|
|
*
|
|
Net
loss attributable to Caesars
|
(217.6)
|
|
|
(280.6)
|
|
|
22.5%
|
|
Basic
and diluted loss per share (2)
|
(1.74)
|
|
|
(2.24)
|
|
|
22.3%
|
|
Property
EBITDA (3)
|
487.4
|
|
|
556.6
|
|
|
(12.4)%
|
|
Adjusted
EBITDA (4)
|
469.7
|
|
|
520.7
|
|
|
(9.8)%
|
|
Net revenues, income from operations,
and loss from continuing operations, net of income taxes for all
periods presented in the table above exclude the results of the
Harrah's St. Louis casino which was
sold in November 2012, the results of
Alea Leeds casino which was closed in March 2013
and the results of the subsidiaries that hold the Company's land
concession in Macau, all of which are
presented as discontinued operations.
See footnotes following Caesars
Entertainment Operating Company, Inc. results later in this release.
___________________
* Not meaningful.
Management Commentary
"During the first quarter, we made
significant progress in expanding and upgrading our existing
facilities, particularly in Las Vegas,"
said Gary Loveman, Caesars
Entertainment's chairman, president and chief executive officer. "We
opened the Nobu Hotel and restaurant at Caesars Palace, began the
conversion of the former Bill's Gamblin' Hall & Saloon into a
luxury lifestyle resort to be known as Gansevoort Las Vegas and
continued work on the Linq retail, dining and entertainment experience
expected to open in phases beginning in the fourth quarter. We also
continued with room upgrades at The Quad Resort & Casino and Bally's Las Vegas.
"On the other hand, Atlantic City continued to struggle with
economic and competitive pressures and a slow recovery from the impact
of Hurricane Sandy, while a nationwide slowdown in casino customer
spending as the year began and the strong growth recorded in the 2012
first quarter resulted in an unfavorable comparison for the 2013 first
quarter," said Loveman.
"In concert with Rock Gaming, we opened
Horseshoe Cincinnati in March and last month celebrated the opening of
Thistledown Racino near Cleveland,"
he said. "We also continued efforts to win a gaming license with
Suffolk Downs in Boston and presented
our vision of an integrated resort to officials in Toronto.
"Last month, we announced that our
board of directors has approved the material terms of a transaction
including the formation of Caesars Growth Partners, an entity that will
own our stake in Caesars Interactive Entertainment, Inc., Planet
Hollywood Resort & Casino in Las Vegas
and our joint-venture interests in Horseshoe Baltimore," Loveman said.
"This transaction will help strengthen our balance sheet and our
ability to pursue growth opportunities."
Financial Results
Net revenues decreased $62.9 million and casino revenues declined $129.9 million in the first quarter 2013
compared to the very strong prior year quarter, as a result of declines
in overall visitation to Caesars' properties, likely related to
weakness in consumer sentiment, particularly among less affluent
consumers.
Revenues dropped most significantly in
the Atlantic City region due to
continued competitive pressure in the region, weakness in the economic
environment, and the slow recovery from Hurricane Sandy. In addition,
revenues in Las Vegas were impacted
by the continuing construction activity for Project Linq, including the
ongoing renovation of The Quad Resort & Casino, and the closure of
Bill's Gamblin' Hall & Saloon in February
2013 for renovation. Revenues attributable to Caesars
Interactive Entertainment, Inc. ("CIE") increased from the prior year
quarter due partially to the late-2012 acquisition of substantially all
of the assets of Buffalo Studios, LLC ("Buffalo"), creator of Bingo
Blitz, and continued strength in the social and mobile games business.
Revenues for the Company's Managed
properties increased $60.7 million from
the prior year quarter, mainly due to new managed projects, including
Horseshoe Cleveland, which opened in May 2012,
Horseshoe Cincinnati, which opened in March 2013,
and the management company for Caesars Windsor, which the Company is
now consolidating due to the fact that it increased its ownership from
50% to 100%.
First quarter 2013 income from
operations increased $80.5 million, or
131.3%, compared to the first quarter 2012. The increase was primarily
due to $174.0 million of tangible asset
impairment charges in the first quarter 2012, compared to a $20.0 million intangible asset impairment
charge in the first quarter 2013. Additionally, the following items
adversely impacted the comparability of income from operations:
- a first quarter 2012 property tax refund of approximately $10 million that did not recur in 2013,
- a first quarter 2012 benefit from the receipt of business
interruption insurance proceeds of approximately $7
million that did not recur in 2013,
- an approximately $6 million to $8
million decrease in first quarter 2013 operating income due to
the continuing construction activity for Project Linq, and
- a $52.4 million charge for a
contingent earnout liability recorded during the first quarter 2013
related to CIE's acquisition of Buffalo's assets.
Aside from these items affecting
comparability, income from operations increased slightly due mainly to
a first quarter 2013 benefit from decreases in certain costs when
compared to the prior year quarter, including a $17.8
million decrease in depreciation expense resulting from assets
that became fully depreciated early in the current quarter, a $16.1 million decrease in corporate expense
due primarily to a reduction in stock-based compensation expense, and
decreases in expenses resulting from the Company's cost savings
initiatives. These declines in expenses were partially offset by lower
casino revenues in the first quarter 2013 when compared to the prior
year quarter.
Net loss attributable to Caesars
decreased $63.0 million, or 22.5%, in
the first quarter 2013 from 2012. The decrease was due mainly to the $80.5 million increase in income from
operations described above and a $131.9 million
increase in the benefit for income taxes. Partially offsetting the
impact of the above factors was a $12.7 million
increase in interest expense, net of interest capitalized, a $82.5 million unfavorable change in
(loss)/gain on early extinguishments of debt, and a $48.3 million unfavorable change in the
(loss)/income from discontinued operations, net of income taxes,
partially as a result of the sale of Harrah's St.
Louis, all of which are further described in "Other Items" that
follows later in this release.
The declines in first quarter 2013
Property EBITDA and Adjusted EBITDA from 2012 are primarily driven by
the factors described above. Further details on these non-GAAP
financial measures are found later in this release.
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.
On a consolidated basis, first-quarter
cash average daily room rates for 2013 remained flat from 2012 as lower
rates caused by reduced business in Atlantic
City and the change in the mix of group business in the Las Vegas region were offset by rate
increases in the Louisiana/Mississippi and Other Nevada regions. Total
occupancy percentage decreased 2.9 percentage points in the first
quarter 2013 from 2012 due to declines in all U.S. regions but most
significantly in Atlantic City.
Las Vegas Region
Las Vegas Region properties include Bally's Las Vegas,
Bill's Gamblin' Hall & Saloon ("Bill's"), Caesars Palace, Flamingo
Las Vegas, Harrah's Las Vegas, The
Quad Resort & Casino (the "Quad"), Paris Las Vegas, Planet
Hollywood Resort & Casino, and Rio. Bill's Gamblin' Hall &
Saloon temporarily closed in early February 2013
to accommodate previously disclosed renovations and is expected to
reopen in phases beginning in December 2013
as Gansevoort Las Vegas.
|
Quarter
Ended March 31,
|
|
Percent
Favorable/
(Unfavorable)
|
(Dollars
in millions)
|
2013
|
|
2012
|
|
Net
revenues
|
$
|
751.7
|
|
|
$
|
771.6
|
|
|
(2.6)%
|
|
Income
from operations
|
104.3
|
|
|
120.1
|
|
|
(13.2)%
|
|
Property
EBITDA (3)
|
197.9
|
|
|
211.3
|
|
|
(6.3)%
|
|
Net revenues decreased $19.9 million, or 2.6%, in the first quarter
2013 compared with the prior year quarter. Construction activities
associated with Project Linq and activities associated with the
renovations of the Quad and Bill's have unfavorably impacted the
revenues in the region, as well as the comparison to a strong quarter
in the prior year. The Company estimates that these development and
construction activities reduced first quarter 2013 revenues in Las Vegas by approximately $10 million to $13 million and reduced income
from operations and Property EBITDA by approximately $6 million to $8 million.
Casino revenues were down $23.7 million, or 5.7%, due to an overall
reduction in visitation to the region's properties.
Food and Beverage revenues increased $16.3 million, or 8.2%, due to the addition of
several new restaurant offerings such as Bacchanal Buffet and Nobu at
Caesars Palace and Gordon Ramsay-branded
restaurants at Caesars Palace, Paris,
and Planet Hollywood.
Hotel revenues were down $6.6 million, or 3.4%, as a result of a
decrease in cash average daily room rates from $95
in 2012 to $94 in 2013 and a decrease in
occupancy of 1.4 percentage points driven mainly by a change in the mix
of group business, and the impact of the renovations of the Quad and
Bill's and the Project Linq construction activities.
Overall, property operating expenses in
the region declined as a result of decreases in costs attributable to
the Company's cost savings initiatives which were partially offset by
an increase in bad debt expense and increases in variable costs
associated with higher Food and Beverage revenue. Depreciation expense
in the region decreased as a result of assets becoming fully
depreciated, while write-downs, reserves, and project opening costs,
net of recoveries increased as a result of additional remediation costs
in 2013 when compared with 2012.
Property EBITDA declined $13.4 million, or 6.3% , due mainly to the
factors above.
Atlantic City Region
Atlantic City Region properties include
Bally's Atlantic City, Caesars Atlantic City,
Harrah's Atlantic City, Harrah's Philadelphia and Showboat Atlantic City.
|
Quarter
Ended March 31,
|
|
Percent
Favorable/
(Unfavorable)
|
(Dollars
in millions)
|
2013
|
|
2012
|
|
Net
revenues
|
$
|
365.3
|
|
|
$
|
432.5
|
|
|
(15.5)%
|
|
(Loss)/income
from operations
|
(3.2)
|
|
|
18.8
|
|
|
*
|
|
Property
EBITDA (3)
|
51.2
|
|
|
69.9
|
|
|
(26.8)%
|
|
* Not meaningful.
The Atlantic
City region continues to be affected by a weak economic
environment, and the very slow recovery from the effects of Hurricane
Sandy, which made landfall in the fourth quarter 2012. This, combined
with continued competitive pressure in the region, has caused a
significant decline in visitation to the region's properties as
compared to 2012. As a result, net revenues in the region declined $67.2 million, or 15.5%, in the first quarter
of 2013 from the year-earlier period.
However, property operating expenses in
2013 were also lower than in 2012 as a result of significant decreases
in costs attributable to the Company's cost savings initiatives and
more efficient marketing spending, partially offset by an increase in
write-downs, reserves and project opening costs, net of recoveries. The
2012 quarter income from operations also included approximately $10 million for property tax refund benefits
that did not recur in 2013.
The above factors contributed to the
decrease in Property EBITDA of $18.7 million,
or 26.8% .
The Company expects that the region
will continue to be challenged as a result of the slow recovery from
the hurricane and competitive pressures. In response, the Company will
continue focus on controlling costs to align the cost structure with
lower revenue levels.
Louisiana/Mississippi
Region
Louisiana/Mississippi
Region properties include Grand Casino Biloxi, Harrah's New Orleans, Harrah's Tunica, Horseshoe Bossier City, Horseshoe Tunica, Louisiana Downs, and Tunica
Roadhouse Hotel and Casino.
|
Quarter
Ended March 31,
|
|
Percent
Favorable/
(Unfavorable)
|
(Dollars
in millions)
|
2013
|
|
2012
|
|
Net
revenues
|
$
|
278.9
|
|
|
$
|
303.4
|
|
|
(8.1)%
|
|
Income/(loss)
from operations
|
44.3
|
|
|
(121.0)
|
|
|
*
|
|
Property
EBITDA (3)
|
67.1
|
|
|
77.1
|
|
|
(13.0)%
|
|
* Not meaningful.
Casino revenues declined significantly
during the first quarter 2013 as compared to the same quarter in 2012
due to the weakening in consumer sentiment, contributing to declines in
visitation to the region's properties. Additionally, in the first
quarter 2012, the region benefited from the receipt of business
interruption insurance proceeds of $7.0 million
related to the mid-2011 floods with no similar amount received in the
first quarter 2013. As a result, net revenues in the first quarter 2013
decreased $24.5 million, or 8.1%, from
2012.
Property operating expenses in 2013
were lower than in 2012 as a result of decreases in variable costs
associated with lower revenues and cost decreases attributable to the
Company's cost savings initiatives. In the first quarter 2012, the
Company recorded $167.5 million of
non-cash tangible asset impairment charges and $4.5
million of write-downs, reserves, and project opening costs, net
of recoveries related to a halted development project in Biloxi, Mississippi, with no comparable
charges in the first quarter 2013. Prior to consideration of these 2012
charges and business interruption insurance proceeds, income from
operations in the first quarter 2013 was relatively flat compared with
2012.
Lower revenues, partially offset by
lower property operating expenses, resulted in a decrease in Property
EBITDA of $10.0 million, or 13.0%.
Iowa/Missouri
Region
Iowa/Missouri
Region properties include Harrah's Council
Bluffs, Harrah's North Kansas City
and Horseshoe Council Bluffs. On November 2,
2012, Caesars sold its Harrah's St
Louis casino; therefore, the results in the table below exclude
those of the Harrah's St. Louis
casino for all periods presented.
|
Quarter
Ended March 31,
|
|
Percent
Favorable/
(Unfavorable)
|
(Dollars
in millions)
|
2013
|
|
2012
|
|
Net
revenues
|
$
|
110.5
|
|
|
$
|
118.7
|
|
|
(6.9)%
|
|
Income
from operations
|
29.4
|
|
|
27.6
|
|
|
6.5%
|
|
Property
EBITDA (3)
|
36.7
|
|
|
35.0
|
|
|
4.9%
|
|
The Company experienced lower
visitation to the region's properties in the first quarter of 2013 as
compared to the prior year period, likely attributable to weakness in
consumer sentiment combined with favorable weather conditions in the
prior year quarter. The decline in visitation was primarily
concentrated in certain lower value guest segments. As a result, casino
revenues declined $7.5 million compared
to 2012.
Property operating expenses in 2013
were lower than in 2012 as a result of significant decreases in costs
attributable to the Company's cost savings initiatives and more
efficient marketing spending. These decreases more than offset the
income impact of revenue declines resulting in an increase in income
from operations, and Property EBITDA.
Illinois/Indiana
Region
Illinois/Indiana
Region properties include Harrah's Joliet,
Harrah's Metropolis, Horseshoe Hammond and Horseshoe Southern Indiana.
|
Quarter
Ended March 31,
|
|
Percent
Favorable/
(Unfavorable)
|
(Dollars
in millions)
|
2013
|
|
2012
|
|
Net
revenues
|
$
|
260.5
|
|
|
$
|
273.1
|
|
|
(4.6)%
|
|
Income
from operations
|
22.4
|
|
|
38.2
|
|
|
(41.4)%
|
|
Property
EBITDA (3)
|
60.7
|
|
|
57.7
|
|
|
5.2%
|
|
The Company experienced lower
visitation to the region's properties in the first quarter of 2013 as
compared to the prior year period, likely attributable to weakness in
consumer sentiment combined with favorable weather in the prior year
quarter. The decline in visitation was primarily concentrated in
certain lower value guest segments. As a result, casino revenues
declined $12.4 million compared to 2012.
Property operating expenses in 2013
were lower than in 2012 as a result of decreases in costs attributable
to the Company's cost savings initiatives and more efficient marketing
spending. In addition, the Company recorded a non-cash intangible asset
impairment charge related to gaming rights of $20.0
million in the first quarter 2013, with no comparable charge in
the first quarter 2012.
The decline in property operating
expenses more than offset the decline in revenues, resulting in an
increase in Property EBITDA of $3.0 million,
or 5.2%.
Other Nevada Region
Other Nevada Region properties include
Harrah's Lake Tahoe, Harrah's Laughlin, Harrah's Reno and Harveys Lake Tahoe.
|
Quarter
Ended March 31,
|
|
Percent
Favorable/
(Unfavorable)
|
(Dollars
in millions)
|
2013
|
|
2012
|
|
Net
revenues
|
$
|
99.4
|
|
|
$
|
100.7
|
|
|
(1.3)%
|
|
Income
from operations
|
5.2
|
|
|
5.7
|
|
|
(8.8)%
|
|
Property
EBITDA (3)
|
13.6
|
|
|
16.8
|
|
|
(19.0)%
|
|
Net revenues in the region were
slightly lower in the first quarter 2013 compared with 2012. Income
from operations and Property EBITDA decreased as a result of lower
revenues combined with an increase in property operating expenses. Also
impacting income from operations, but not Property EBITDA, is a decline
in depreciation expense as a result of assets becoming fully
depreciated.
Managed, International and Other
The Managed region includes companies
that operate three Indian-owned casinos, as well as Horseshoe
Cleveland, Horseshoe Cincinnati (which opened in March
2013) 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 upon video lottery
terminal operations commencing in April 2013.
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. ("CIE"), 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 the Company's
social and mobile games businesses.
In the fourth quarter 2012, the Company
began discussions with interested parties with respect to a sale of the
subsidiaries that hold the Company's land concession in Macau. As a result of this plan of
disposal, those assets and liabilities have been classified as held for
sale at March 31, 2013 and December 31, 2012 and their operating results
have been classified as discontinued operations for all periods
presented and are excluded from the table below.
On March 4, 2013,
the Company closed the Alea Leeds casino in England
and its operating results have been classified as discontinued
operations for all periods presented and are excluded from the table
below.
|
Quarter
Ended March 31,
|
|
Percent
Favorable/
(Unfavorable)
|
(Dollars
in millions)
|
2013
|
|
2012
|
|
Net
revenues
|
|
|
|
|
|
Managed
|
$
|
71.7
|
|
|
$
|
11.0
|
|
|
551.8%
|
|
International
|
124.2
|
|
|
130.4
|
|
|
(4.8)%
|
|
Other
|
81.0
|
|
|
64.7
|
|
|
25.2%
|
|
Total
net revenues
|
$
|
276.9
|
|
|
$
|
206.1
|
|
|
34.4%
|
|
(Loss)/income
from operations
|
|
|
|
|
|
Managed
|
$
|
4.6
|
|
|
$
|
2.0
|
|
|
130.0%
|
|
International
|
21.7
|
|
|
21.8
|
|
|
(0.5)%
|
|
Other
|
(86.9)
|
|
|
(51.9)
|
|
|
(67.4)%
|
|
Total
loss from operations
|
$
|
(60.6)
|
|
|
$
|
(28.1)
|
|
|
(115.7)%
|
|
Managed
Revenues for the Company's Managed
properties increased $60.7 million from
the prior year quarter, primarily due to new managed projects,
including Horseshoe Cleveland, which opened in May
2012, Horseshoe Cincinnati, which opened in March 2013, and the management company for
Caesars Windsor, the results of which have been consolidated into the
our financial statements since June 2012
when we increased our 50% ownership to 100%. A large portion of these
revenues represent reimbursable payroll expenses.
International
Visitation to the London Clubs
properties declined from the first quarter 2012 due to competitive
pressures which largely resulted in revenue declines of $9.0 million for these casinos. The revenues
at the Company's property in Uruguay
rose $2.8 million for the first quarter
2013 compared with 2012. Property operating expenses in 2013 were lower
than in 2012 as a result of decreases in variable costs associated with
lower revenues from London Clubs and a decrease in costs attributable
to the Company's cost savings initiatives. As a result of the above,
income from operations decreased $0.1 million,
or 0.5%.
Other
In late 2012, CIE acquired
substantially all of the assets of Buffalo, a social media and mobile
games developer and owner of Bingo Blitz, a social and mobile bingo
game. This acquisition, combined with the continued strength in CIE's
social and mobile games business drove most of the $16.3 million, or 25.2%, increase in revenues
for the Other region in the first quarter 2013 from 2012. Expenses rose
due to increases in variable costs associated with higher revenues and
a charge of $52.4 million for contingent
earnout liability in the first quarter 2013 relating to the acquisition
of the Buffalo assets. The Company also recorded $6.5
million of tangible asset impairments in the first quarter 2012
with no comparable charges in the first quarter of 2013. Corporate
expenses, were down $16.1 million
primarily due to a decrease in stock-based compensation expense. These
factors resulted in an increase in loss from operations for the Other
region of $35.0 million, or 67.4%.
Other Items
Interest Expense, Net of Interest
Capitalized
Interest expense, net of interest
capitalized, increased by $12.7 million,
or 2.3%, in the first quarter 2013, 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,
partially offset by mark-to-market gains on derivatives in 2013
compared with losses in 2012.
(Loss)/Gain on Early Extinguishments
of Debt
During the first quarter of 2013, the
Company recognized a loss on early extinguishments of debt of $36.7 million, primarily related to
extinguishments of debt under the CEOC Credit Facilities. During the
first quarter of 2012, the Company recognized a gain on early
extinguishments of debt of $45.8 million,
net of deferred financing costs, due to the purchase of $118.7 million face value of CMBS Loans for $71.8 million.
Benefit for Income Taxes
The effective tax rate benefit for the
first quarter of 2013 and 2012 was 62.3% and 35.4%, respectively. The
effective rate benefit in the first quarter of 2013 was primarily
impacted by a discrete tax benefit from a capital loss resulting from a
tax election made for U.S. federal income tax purposes during the
quarter but effective at the end of December 2012. In addition, the
rate was favorably impacted by (i) retroactive U.S. tax law changes
which were enacted in January 2013 and
(ii) a favorable tax ruling in Israel
received in February 2013.
(Loss)/Income from Discontinued
Operations, Net of Income Taxes
Loss from discontinued operations, net
of income taxes in the first quarter 2013 was $41.0
million and includes a $21.0 million
tangible asset impairment charge related to the land concession in Macau, and charges totaling $21.5 million for exit activities and the
write-down of tangible and intangible assets related to the March 4, 2013 closure of the Alea Leeds
casino. Income from discontinued operations, net of income taxes in the
first quarter 2012 was $7.3 million and
includes $11.6 million of income from
operations related to the Harrah's St. Louis
casino which was sold on November 2, 2012.
Cost-Savings Initiatives
Caesars Entertainment has undertaken
comprehensive cost-reduction efforts to rightsize expenses with
business levels. The Company estimates that its cost-savings programs
produced $66.4 million in incremental
cost savings for the first quarter of 2013 compared with the same
period in 2012. Additionally, as of March 31, 2013, the Company expects
that these and additional new cost-savings programs will produce
additional annual cost-savings of $154.9 million,
based on the full implementation of current projects that are in
process. As the Company realizes savings or identifies new
cost-reduction activities, this amount will change.
Caesars Entertainment Operating
Company, Inc. Results
As a substantial portion of the debt of
Caesars Entertainment's consolidated group is issued by Caesars
Entertainment Operating Company, Inc. ("CEOC"), the Company believes it
is meaningful to provide information on the results of operations of
CEOC, which 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 March 31,
|
|
Percent
Favorable/
(Unfavorable)
|
(Dollars
in millions)
|
2013
|
|
2012
|
|
Net
revenues
|
$
|
1,617.9
|
|
|
$
|
1,676.0
|
|
|
(3.5)%
|
|
Income
from operations (1)
|
150.0
|
|
|
10.2
|
|
|
*
|
|
Loss
from continuing operations, net of income taxes
|
(167.3)
|
|
|
(336.9)
|
|
|
50.3%
|
|
(Loss)/income
from discontinued operations, net of income taxes
|
(41.0)
|
|
|
7.3
|
|
|
*
|
|
Net
loss attributable to CEOC
|
(210.8)
|
|
|
(328.9)
|
|
|
35.9%
|
|
Property
EBITDA (3)
|
373.3
|
|
|
437.8
|
|
|
(14.7)%
|
|
Adjusted
EBITDA (4)
|
350.2
|
|
|
401.1
|
|
|
(12.7)%
|
|
Net revenues, income from operations,
and loss from continuing operations, net of income taxes for all
periods presented in the table above exclude the results of the
Harrah's St. Louis casino which was
sold in November 2012, the results of
Alea Leeds casino which was closed on March 04,
2013 and the results of the subsidiaries that hold the Company's
land concession in Macau, all of
which are presented as discontinued operations.
___________________
* Not meaningful.
(1)
|
Income
from operations for both Caesars and CEOC for the first quarter of 2013
and 2012 includes intangible and tangible asset impairment charges of
$20.0 million and $174.0 million, respectively.
|
(2)
|
Basic
and diluted loss per share for Caesars for the periods shown includes
loss per share from discontinued operations in the first quarter of
2013 of $0.33 per share and earnings per share from discontinued
operations for the first quarter of 2012 of $0.06 per share.
|
(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, May 1, 2013 to
review its first-quarter results. The call will be accessible in the
Investor Relations section of www.caesars.com.
If you would like to ask questions and
be an active participant in the call, you may dial 877-637-3676, or
832-412-1752 for international callers, and enter Conference ID
42726371 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 provider and the most
geographically diverse U.S. 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. The Company is 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 substantial indebtedness and
the restrictions in the Company's debt agreements;
- access to available and reasonable financing on a timely
basis, including the ability of the Company to refinance its
indebtedness on acceptable terms;
- the 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;
- changes in the extensive governmental regulations to which
the Company and its stockholders 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;
- 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;
- the effects of competition, including locations of
competitors and operating and market competition;
- 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 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;
- acts of war or terrorist incidents, severe weather
conditions, uprisings or natural disasters, including losses therefrom,
including losses in revenues and damage to property, and the impact of
severe weather conditions on the Company's ability to attract customers
to certain of its facilities, such as the amount of losses and
disruption to the Company as a result of Hurricane Sandy in late October 2012;
- 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;
- 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 March 31,
|
(In
millions, except per share data)
|
2013
|
|
2012
|
Net
revenues
|
$
|
2,143.2
|
|
|
$
|
2,206.1
|
|
Property
operating expenses
|
(1,654.7)
|
|
|
(1,672.5)
|
|
Depreciation
and amortization
|
(161.7)
|
|
|
(179.5)
|
|
Write-downs,
reserves, and project opening costs, net of recoveries
|
(20.7)
|
|
|
(16.2)
|
|
Intangible
and tangible asset impairment charges
|
(20.0)
|
|
|
(174.0)
|
|
Loss
on interests in non-consolidated affiliates
|
(2.6)
|
|
|
(7.1)
|
|
Corporate
expense
|
(36.1)
|
|
|
(52.2)
|
|
Acquisition
and integration costs
|
(64.2)
|
|
|
(0.1)
|
|
Amortization
of intangible assets
|
(41.4)
|
|
|
(43.2)
|
|
Income
from operations
|
141.8
|
|
|
61.3
|
|
Interest
expense, net of interest capitalized
|
(574.7)
|
|
|
(562.0)
|
|
(Loss)/gain
on early extinguishments of debt
|
(36.7)
|
|
|
45.8
|
|
Other
income, including interest income
|
3.7
|
|
|
8.2
|
|
Loss
from continuing operations before income taxes
|
(465.9)
|
|
|
(446.7)
|
|
Benefit
for income taxes
|
290.2
|
|
|
158.3
|
|
Loss
from continuing operations, net of income taxes
|
(175.7)
|
|
|
(288.4)
|
|
Discontinued
operations
|
|
|
|
(Loss)/income
from discontinued operations
|
(43.8)
|
|
|
14.2
|
|
Benefit/(provision)
for income taxes
|
2.8
|
|
|
(6.9)
|
|
(Loss)/income
from discontinued operations, net of income taxes
|
(41.0)
|
|
|
7.3
|
|
Net
loss
|
(216.7)
|
|
|
(281.1)
|
|
Less:
net (income)/loss attributable to non-controlling interests
|
(0.9)
|
|
|
0.5
|
|
Net
loss attributable to Caesars
|
$
|
(217.6)
|
|
|
$
|
(280.6)
|
|
|
|
|
|
(Loss)/earnings
per share - basic and diluted
|
|
|
|
Loss
per share from continuing operations
|
$
|
(1.41)
|
|
|
$
|
(2.30)
|
|
(Loss)/earnings
per share from discontinued operations
|
(0.33)
|
|
|
0.06
|
|
Net
loss per share
|
$
|
(1.74)
|
|
|
$
|
(2.24)
|
|
CAESARS
ENTERTAINMENT CORPORATION
CONSOLIDATED
SUMMARY BALANCE SHEETS
(UNAUDITED)
|
|
As
of
|
(In
millions)
|
March
31, 2013
|
|
December
31, 2012
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash
and cash equivalents
|
$
|
2,095.4
|
|
|
$
|
1,757.5
|
|
Restricted Cash (a)
|
70.6
|
|
|
833.6
|
|
Assets held for sale (b)
|
5.2
|
|
|
5.1
|
|
Other
current assets
|
959.9
|
|
|
897.4
|
|
Total
current assets
|
3,131.1
|
|
|
3,493.6
|
|
Property
and equipment, net
|
15,676.2
|
|
|
15,701.7
|
|
Goodwill
and other intangible assets
|
7,087.7
|
|
|
7,146.0
|
|
Restricted
cash
|
295.9
|
|
|
364.6
|
|
Assets
held for sale (b)
|
442.6
|
|
|
471.2
|
|
Other
long-term assets
|
841.5
|
|
|
821.0
|
|
|
$
|
27,475.0
|
|
|
$
|
27,998.1
|
|
Liabilities
and Stockholders' Deficit
|
|
|
|
Current
liabilities
|
|
|
|
Current portion of long-term debt (a)
|
$
|
143.0
|
|
|
$
|
879.9
|
|
Liabilities held for sale (b)
|
3.5
|
|
|
3.8
|
|
Other
current liabilities
|
1,757.5
|
|
|
1,704.6
|
|
Total
current liabilities
|
1,904.0
|
|
|
2,588.3
|
|
Long-term
debt
|
21,134.1
|
|
|
20,532.2
|
|
Liabilities
held for sale (b)
|
49.7
|
|
|
52.1
|
|
Other
long-term liabilities
|
4,947.2
|
|
|
5,157.1
|
|
|
28,035.0
|
|
|
28,329.7
|
|
Total
Caesars stockholders' deficit
|
(637.1)
|
|
|
(411.7)
|
|
Non-controlling
interests
|
77.1
|
|
|
80.1
|
|
Total
deficit
|
(560.0)
|
|
|
(331.6)
|
|
|
$
|
27,475.0
|
|
|
$
|
27,998.1
|
|
(a)
|
The
balance of restricted cash at December 31, 2012 includes $750.0 million
of escrow proceeds related to the Company's December 13, 2012 bond
offering and the related debt obligation is included in the current
portion of long-term debt until the escrow conditions are met. Escrow
conditions were met in February 2013, at which time the cash was
released from restriction and the debt obligation was re-classified to
long-term.
|
(b)
|
The
balances at March 31, 2013 and December 31, 2012 relate to the
subsidiaries that hold the Company's land concession in Macau.
|
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 March 31, 2013
|
(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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(217.6)
|
|
Net
income attributable to non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.9
|
|
Net
loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(216.7)
|
|
Loss
from discontinued operations, net of income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
41.0
|
|
Net
loss from continuing operations, net of income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(175.7)
|
|
Benefit
for income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(290.2)
|
|
Loss
from continuing operations before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(465.9)
|
|
Other
income, including interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3.7)
|
|
Loss
on early extinguishments of debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36.7
|
|
Interest
expense, net of interest capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
574.7
|
|
Income/(loss)
from operations
|
$
|
104.3
|
|
|
$
|
(3.2)
|
|
|
$
|
44.3
|
|
|
$
|
29.4
|
|
|
$
|
22.4
|
|
|
$
|
5.2
|
|
|
$
|
(60.6)
|
|
|
|
|
141.8
|
|
Depreciation
and amortization
|
61.5
|
|
|
42.4
|
|
|
17.1
|
|
|
7.3
|
|
|
18.1
|
|
|
4.9
|
|
|
10.4
|
|
|
|
|
161.7
|
|
Amortization
of intangible assets
|
19.0
|
|
|
4.0
|
|
|
5.5
|
|
|
—
|
|
|
0.3
|
|
|
3.5
|
|
|
9.1
|
|
|
|
|
41.4
|
|
Intangible
and tangible asset impairment charges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20.0
|
|
|
—
|
|
|
—
|
|
|
|
|
20.0
|
|
Write-downs,
reserves, and project opening costs, net of recoveries
|
13.6
|
|
|
8.0
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.3)
|
|
|
|
|
20.7
|
|
Acquisition
and integration costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
64.2
|
|
|
|
|
64.2
|
|
(Income)/loss
on interests in non-consolidated affiliates
|
(0.5)
|
|
|
—
|
|
|
(0.2)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.3
|
|
|
|
|
2.6
|
|
Corporate
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36.1
|
|
|
|
|
36.1
|
|
EBITDA
attributable to discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(1.1)
|
|
|
(1.1)
|
|
Property
EBITDA
|
$
|
197.9
|
|
|
$
|
51.2
|
|
|
$
|
67.1
|
|
|
$
|
36.7
|
|
|
$
|
60.7
|
|
|
$
|
13.6
|
|
|
$
|
61.3
|
|
|
$
|
(1.1)
|
|
|
$
|
487.4
|
|
CAESARS
ENTERTAINMENT CORPORATION
SUPPLEMENTAL
INFORMATION
RECONCILIATION
OF NET LOSS ATTRIBUTABLE TO CAESARS ENTERTAINMENT CORPORATION
TO
PROPERTY EBITDA
(UNAUDITED)
|
|
|
|
Quarter
Ended March 31, 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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(280.6)
|
|
Net
loss attributable to non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.5)
|
|
Net
loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(281.1)
|
|
Income
from discontinued operations, net of income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7.3)
|
|
Net
loss from continuing operations, net of income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(288.4)
|
|
Benefit
for income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(158.3)
|
|
Loss
from continuing operations before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(446.7)
|
|
Other
income, including interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8.2)
|
|
Gains
on early extinguishments of debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(45.8)
|
|
Interest
expense, net of interest capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
562.0
|
|
Income/(loss)
from operations
|
$
|
120.1
|
|
|
$
|
18.8
|
|
|
$
|
(121.0)
|
|
|
$
|
27.6
|
|
|
$
|
38.2
|
|
|
$
|
5.7
|
|
|
$
|
(28.1)
|
|
|
|
|
61.3
|
|
Depreciation
and amortization
|
69.3
|
|
|
44.6
|
|
|
18.7
|
|
|
7.4
|
|
|
18.9
|
|
|
7.1
|
|
|
13.5
|
|
|
|
|
179.5
|
|
Amortization
of intangible assets
|
19.0
|
|
|
4.0
|
|
|
5.5
|
|
|
—
|
|
|
0.3
|
|
|
3.5
|
|
|
10.9
|
|
|
|
|
43.2
|
|
Intangible
and tangible asset impairment charges
|
—
|
|
|
—
|
|
|
167.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.5
|
|
|
|
|
174.0
|
|
Write-downs,
reserves, and project opening costs, net of recoveries
|
3.6
|
|
|
1.9
|
|
|
6.4
|
|
|
—
|
|
|
0.3
|
|
|
0.6
|
|
|
3.4
|
|
|
|
|
16.2
|
|
Acquisition
and integration costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
|
|
0.1
|
|
(Income)/loss
on interests in non-consolidated affiliates
|
(0.8)
|
|
|
0.6
|
|
|
(0.1)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.4
|
|
|
|
|
7.1
|
|
Corporate
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
52.2
|
|
|
|
|
52.2
|
|
EBITDA
attributable to discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
23.0
|
|
|
23.0
|
|
Property
EBITDA
|
$
|
211.3
|
|
|
$
|
69.9
|
|
|
$
|
77.1
|
|
|
$
|
35.0
|
|
|
$
|
57.7
|
|
|
$
|
16.8
|
|
|
$
|
65.8
|
|
|
$
|
23.0
|
|
|
$
|
556.6
|
|
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 March 31, 2013 and 2012 and for the year
ended December 31, 2012, and reconciles net loss attributable to
Caesars to LTM Adjusted EBITDA-Pro Forma for the last twelve months
ended March 31, 2013.
|
|
(1)
|
|
(2)
|
|
(3)
|
|
|
(In
millions)
|
Quarter
Ended
March
31, 2013
|
|
Quarter
Ended
March
31, 2012
|
|
Year
Ended
December
31, 2012
|
|
(1)-(2)+(3)
LTM
|
Net
loss attributable to Caesars
|
$
|
(217.6)
|
|
|
$
|
(280.6)
|
|
|
$
|
(1,497.5)
|
|
|
$
|
(1,434.5)
|
|
Interest
expense, net of interest capitalized and interest income
|
571.5
|
|
|
554.9
|
|
|
2,079.2
|
|
|
2,095.8
|
|
Benefit
for income taxes (a)
|
(293.0)
|
|
|
(151.4)
|
|
|
(820.4)
|
|
|
(962.0)
|
|
Depreciation
and amortization (b)
|
206.6
|
|
|
234.6
|
|
|
931.1
|
|
|
903.1
|
|
EBITDA
|
267.5
|
|
|
357.5
|
|
|
692.4
|
|
|
602.4
|
|
Project
opening costs, abandoned projects and development costs (c)
|
19.3
|
|
|
7.9
|
|
|
71.7
|
|
|
83.1
|
|
Acquisition
and integration costs (d)
|
64.2
|
|
|
0.1
|
|
|
6.1
|
|
|
70.2
|
|
Loss/(gain)
on early extinguishments of debt (e)
|
36.7
|
|
|
(45.8)
|
|
|
(136.0)
|
|
|
(53.5)
|
|
Net
income/(loss) attributable to non-controlling interests, net of
(distributions) (f)
|
(1.1)
|
|
|
(2.0)
|
|
|
(3.3)
|
|
|
(2.4)
|
|
Impairments
of intangible and tangible assets (g)
|
46.7
|
|
|
174.0
|
|
|
1,168.7
|
|
|
1,041.4
|
|
Non-cash
expense for stock compensation benefits (h)
|
3.6
|
|
|
11.5
|
|
|
55.1
|
|
|
47.2
|
|
Adjustments for recoveries from insurance claims for flood losses(i)
|
—
|
|
|
(6.6)
|
|
|
(6.6)
|
|
|
—
|
|
Gain
on sale of discontinued operations (j)
|
0.7
|
|
|
—
|
|
|
(9.3)
|
|
|
(8.6)
|
|
Other
items(k)
|
32.1
|
|
|
24.1
|
|
|
98.9
|
|
|
106.9
|
|
Adjusted
EBITDA
|
$
|
469.7
|
|
|
$
|
520.7
|
|
|
$
|
1,937.7
|
|
|
1,886.7
|
|
Proforma
adjustments related to properties (l)
|
|
|
|
|
|
|
0.4
|
|
Pro
forma adjustment for estimated cost savings yet-to-be-realized (m)
|
|
|
|
|
|
|
154.9
|
|
Pro
forma adjustments for discontinued operations (n)
|
|
|
|
|
|
|
(33.2)
|
|
LTM
Adjusted EBITDA-Pro Forma
|
|
|
|
|
|
|
$
|
2,008.8
|
|
(a)
|
Amounts
include a benefit for income taxes related to discontinued operations
of $2.8 million for the first quarter 2013 and a provision for income
taxes related to discontinued operations of $6.9 million and $50.1
million for the first quarter 2012 and for the year ended December 31,
2012, respectively.
|
(b)
|
Amounts
include depreciation and amortization related to discontinued
operations of $0.2 million, $8.8 million and $29.0 million for the
first quarter 2013 and 2012 and for the year ended December 31, 2012,
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. Amounts include
write-offs related to the closure of Alea Leeds in March 2013 which are
included in loss from discontinued operations of $15.8 million for the
first quarter 2013. There were no write-off costs related to
discontinued operations for the first quarter 2012 and for the year
ended December 31, 2012.
|
(d)
|
Amounts
include certain costs associated with acquisition and development
activities and reorganization activities which are infrequently
occurring costs.
|
(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. Amounts include impairment charges related
to discontinued operations of $26.7 million and $101.0 million for the
first quarter of 2013 for the year ended December 31, 2012,
respectively. There were no impairment charges related to discontinued
operations for the first quarter 2012.
|
(h)
|
Amounts
represent non-cash stock-based compensation expense related to stock
options and restricted stock 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)
|
Amount
represents the gain recognized on the sale of the Harrah's St. Louis
casino.
|
(k)
|
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 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).
|
(l)
|
Amounts
represent the estimated annualized impact of operating results related
to newly completed construction projects, combined with the estimated
annualized EBITDA impact associated with properties acquired during the
period.
|
(m)
|
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 and cost-savings programs.
|
(n)
|
Per
CEOC's senior secured credit facilities, EBITDA related to the
Company's discontinued operations are 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 March 31,
|
(In
millions)
|
2013
|
|
2012
|
Net
revenues
|
$
|
1,617.9
|
|
|
$
|
1,676.0
|
|
Property
operating expenses
|
(1,243.5)
|
|
|
(1,261.2)
|
|
Depreciation
and amortization
|
(127.2)
|
|
|
(140.4)
|
|
Write-downs,
reserves, and project opening costs, net of recoveries
|
(7.3)
|
|
|
(14.2)
|
|
Intangible
and tangible asset impairment charges
|
(20.0)
|
|
|
(174.0)
|
|
Loss
on interests in non-consolidated affiliates
|
(3.0)
|
|
|
(7.6)
|
|
Corporate
expense
|
(32.1)
|
|
|
(44.3)
|
|
Acquisition
and integration costs
|
(11.8)
|
|
|
—
|
|
Amortization
of intangible assets
|
(23.0)
|
|
|
(24.1)
|
|
Income
from operations
|
150.0
|
|
|
10.2
|
|
Interest
expense, net of interest capitalized
|
(553.5)
|
|
|
(538.5)
|
|
Loss
on early extinguishments of debt
|
(36.7)
|
|
|
—
|
|
Other
income, including interest income
|
3.8
|
|
|
7.7
|
|
Loss
from continuing operations before income taxes
|
(436.4)
|
|
|
(520.6)
|
|
Benefit
for income taxes
|
269.1
|
|
|
183.7
|
|
Loss
from continuing operations, net of income taxes
|
(167.3)
|
|
|
(336.9)
|
|
Discontinued
operations
|
|
|
|
(Loss)/income
from discontinued operations
|
(43.8)
|
|
|
14.2
|
|
Benefit/(provision)
for income taxes
|
2.8
|
|
|
(6.9)
|
|
(Loss)/income
from discontinued operations, net of income taxes
|
(41.0)
|
|
|
7.3
|
|
Net
loss
|
(208.3)
|
|
|
(329.6)
|
|
Less:
net (income)/loss attributable to non-controlling interests
|
(2.5)
|
|
|
0.7
|
|
Net
loss attributable to CEOC
|
$
|
(210.8)
|
|
|
$
|
(328.9)
|
|
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 March 31, 2013
|
(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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(210.8)
|
|
Net
income attributable to non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.5
|
|
Net
loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(208.3)
|
|
Loss
from discontinued operations, net of income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
41.0
|
|
Net
loss from continuing operations, net of income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(167.3)
|
|
Benefit
for income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(269.1)
|
|
Loss
from continuing operations before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(436.4)
|
|
Other
income, including interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3.8)
|
|
Loss
on early extinguishments of debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36.7
|
|
Interest
expense, net of interest capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
553.5
|
|
Income/(loss)
from operations
|
$
|
50.7
|
|
|
$
|
(3.2)
|
|
|
$
|
44.3
|
|
|
$
|
29.4
|
|
|
$
|
22.4
|
|
|
$
|
(0.7)
|
|
|
$
|
7.1
|
|
|
|
|
150.0
|
|
Depreciation
and amortization
|
40.8
|
|
|
30.2
|
|
|
17.1
|
|
|
7.3
|
|
|
18.1
|
|
|
3.6
|
|
|
10.1
|
|
|
|
|
127.2
|
|
Amortization
of intangible assets
|
8.2
|
|
|
3.0
|
|
|
5.5
|
|
|
—
|
|
|
0.3
|
|
|
0.5
|
|
|
5.5
|
|
|
|
|
23.0
|
|
Intangible
and tangible asset impairment charges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20.0
|
|
|
—
|
|
|
—
|
|
|
|
|
20.0
|
|
Write-downs,
reserves, and project opening costs, net of recoveries
|
7.2
|
|
|
1.0
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.3)
|
|
|
|
|
7.3
|
|
Acquisition
and integration costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11.8
|
|
|
|
|
11.8
|
|
(Income)/loss
on interests in non-consolidated affiliates
|
—
|
|
|
—
|
|
|
(0.2)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.2
|
|
|
|
|
3.0
|
|
Corporate
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32.1
|
|
|
|
|
32.1
|
|
EBITDA
attributable to discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(1.1)
|
|
|
(1.1)
|
|
Property
EBITDA
|
$
|
106.9
|
|
|
$
|
30.9
|
|
|
$
|
67.1
|
|
|
$
|
36.7
|
|
|
$
|
60.7
|
|
|
$
|
3.5
|
|
|
$
|
68.6
|
|
|
$
|
(1.1)
|
|
|
$
|
373.3
|
|
CAESARS
ENTERTAINMENT OPERATING COMPANY, INC.
SUPPLEMENTAL
INFORMATION
RECONCILIATION
OF NET LOSS ATTRIBUTABLE TO CAESARS ENTERTAINMENT
OPERATING
COMPANY, INC. TO PROPERTY EBITDA
(UNAUDITED)
|
|
Quarter
Ended March 31, 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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(328.9)
|
|
Net
loss attributable to non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.7)
|
|
Net
loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(329.6)
|
|
Income
from discontinued operations, net of income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7.3)
|
|
Net
loss from continuing operations, net of income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(336.9)
|
|
Benefit
for income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(183.7)
|
|
Loss
from continuing operations before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(520.6)
|
|
Other
income, including interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7.7)
|
|
Interest
expense, net of interest capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
538.5
|
|
Income/(loss)
from operations
|
$
|
64.9
|
|
|
$
|
11.0
|
|
|
$
|
(121.0)
|
|
|
$
|
27.6
|
|
|
$
|
38.2
|
|
|
$
|
(1.8)
|
|
|
$
|
(8.7)
|
|
|
|
|
10.2
|
|
Depreciation
and amortization
|
44.7
|
|
|
31.9
|
|
|
18.7
|
|
|
7.4
|
|
|
18.9
|
|
|
5.4
|
|
|
13.4
|
|
|
|
|
140.4
|
|
Amortization
of intangible assets
|
8.2
|
|
|
3.0
|
|
|
5.5
|
|
|
—
|
|
|
0.3
|
|
|
0.5
|
|
|
6.6
|
|
|
|
|
24.1
|
|
Intangible
and tangible asset impairment charges
|
—
|
|
|
—
|
|
|
167.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.5
|
|
|
|
|
174.0
|
|
Write-downs,
reserves, and project opening costs, net of recoveries
|
1.9
|
|
|
1.7
|
|
|
6.4
|
|
|
—
|
|
|
0.3
|
|
|
0.6
|
|
|
3.3
|
|
|
|
|
14.2
|
|
Acquisition
and integration costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
Loss/(income)
on interests in non-consolidated affiliates
|
—
|
|
|
0.3
|
|
|
(0.1)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.4
|
|
|
|
|
7.6
|
|
Corporate
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44.3
|
|
|
|
|
44.3
|
|
EBITDA
attributable to discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
23.0
|
|
|
23.0
|
|
Property
EBITDA
|
$
|
119.7
|
|
|
$
|
47.8
|
|
|
$
|
77.1
|
|
|
$
|
35.0
|
|
|
$
|
57.7
|
|
|
$
|
4.7
|
|
|
$
|
72.8
|
|
|
$
|
23.0
|
|
|
$
|
437.8
|
|
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 LTM Adjusted EBITDA-Pro Forma 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 March 31, 2013 and 2012 and for the year
ended December 31, 2012, 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 March 31, 2013.
|
|
(1)
|
|
(2)
|
|
(3)
|
|
|
(In
millions)
|
Quarter
Ended
March 31, 2013
|
|
Quarter
Ended
March
31, 2012
|
|
Year
Ended
December
31, 2012
|
|
(1)-(2)+(3)
LTM
|
Net
loss attributable to CEOC
|
$
|
(210.8)
|
|
|
$
|
(328.9)
|
|
|
$
|
(1,627.4)
|
|
|
$
|
(1,509.3)
|
|
Interest
expense, net of capitalized interest and interest income
|
550.0
|
|
|
531.8
|
|
|
1,995.7
|
|
|
2,013.9
|
|
Benefit
for income taxes (a)
|
(271.9)
|
|
|
(176.8)
|
|
|
(884.5)
|
|
|
(979.6)
|
|
Depreciation
and amortization (b)
|
153.7
|
|
|
176.3
|
|
|
701.7
|
|
|
679.1
|
|
EBITDA
|
221.0
|
|
|
202.4
|
|
|
185.5
|
|
|
204.1
|
|
Project
opening costs, abandoned projects and development costs (c)
|
19.2
|
|
|
7.9
|
|
|
55.9
|
|
|
67.2
|
|
Acquisition
and integration costs (d)
|
11.8
|
|
|
—
|
|
|
5.8
|
|
|
17.6
|
|
Loss
on early extinguishments of debt (e)
|
36.7
|
|
|
—
|
|
|
—
|
|
|
36.7
|
|
Net
income/(loss) attributable to non-controlling interests, net of
(distributions) (f)
|
0.5
|
|
|
(2.2)
|
|
|
(4.2)
|
|
|
(1.5)
|
|
Impairments
of intangible and tangible assets (g)
|
46.7
|
|
|
174.0
|
|
|
1,165.7
|
|
|
1,038.4
|
|
Non-cash
expense for stock compensation benefits (h)
|
2.5
|
|
|
11.2
|
|
|
33.4
|
|
|
24.7
|
|
Adjustments for recoveries from insurance claims for
flood
losses (i)
|
—
|
|
|
(6.6)
|
|
|
(6.6)
|
|
|
—
|
|
Gain
on sale of discontinued operations (j)
|
0.7
|
|
|
—
|
|
|
(9.3)
|
|
|
(8.6)
|
|
Other
items (k)
|
11.1
|
|
|
14.4
|
|
|
53.3
|
|
|
50.0
|
|
Adjusted
EBITDA
|
$
|
350.2
|
|
|
$
|
401.1
|
|
|
$
|
1,479.5
|
|
|
1,428.6
|
|
Proforma
adjustments related to properties (l)
|
|
|
|
|
|
|
0.4
|
|
Pro
forma adjustment for estimated cost savings yet-to-be-realized (m)
|
|
|
|
|
|
|
110.9
|
|
Pro
forma adjustments for discontinued operations (n)
|
|
|
|
|
|
|
(33.2)
|
|
LTM
Adjusted EBITDA-Pro Forma
|
|
|
|
|
|
|
1,506.7
|
|
LTM
Adjusted EBITDA-Pro forma of CEOC's unrestricted subsidiaries
|
|
|
|
|
|
|
(103.9)
|
|
LTM
Adjusted EBITDA-Pro Forma - CEOC Restricted
|
|
|
|
|
|
|
$
|
1,402.8
|
|
(a)
|
Amounts
include a benefit for income taxes related to discontinued operations
of $2.8 million for the first quarter 2013 and a provision for income
taxes related to discontinued operations of $6.9 million and $50.1
million for the first quarter 2012 and for the year ended December 31,
2012, respectively.
|
(b)
|
Amounts
include depreciation and amortization related to discontinued
operations of $0.2 million, $8.8 million and $29.0 million for the
first quarter 2013 and 2012 and for the year ended December 31, 2012,
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. Amounts include
write-offs related to the closure of Alea Leeds in March 2013 which are
included in loss from discontinued operations of $15.8 million for the
first quarter 2013. There were no write-off costs related to
discontinued operations for the first quarter 2012 and for the year
ended December 31, 2012.
|
(d)
|
Amounts
include certain costs associated with acquisition and development
activities and reorganization activities which are infrequently
occurring costs.
|
(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 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.
|
(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. Amounts include impairment charges related to
discontinued operations of $26.7 million and $101.0 million for the
first quarter of 2013 for the year ended December 31, 2012,
respectively. There were no impairment charges related to discontinued
operations for the first quarter 2012.
|
(h)
|
Amounts
represent non-cash stock-based compensation expense related to stock
options and restricted stock granted to CEOC's employees.
|
(i)
|
Amounts
represent adjustments for insurance claims related to lost profits
during the floods that occurred in 2011.
|
(j)
|
Amount
represents the gain recognized on the sale of the Harrah's St. Louis
casino.
|
(k)
|
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 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).
|
(l)
|
Amounts
represent the estimated annualized impact of operating results related
to newly completed construction projects, combined with the estimated
annualized EBITDA impact associated with properties acquired during the
period.
|
(m)
|
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 and cost savings programs.
|
(n)
|
Per
CEOC's senior secured credit facilities, EBITDA related to the
Company's discontinued operations are deducted from LTM Adjusted EBITDA
- Pro Forma.
|
|